India's Capital Spending Surges in Fiscal Year 2024-25, Exceeding Revised Targets
New Delhi, India - A significant spending push in March has enabled the Indian government to surpass its revised capital expenditure (capex) target of ₹10.18 lakh crore for the fiscal year 2024-25, according to senior government officials. This achievement comes despite a cautious start to the fiscal year due to the impact of the Lok Sabha elections on fund disbursals.
Capital spending gained considerable traction in the latter half of the fiscal year, culminating in a strong performance in March. Sources suggest that the final capex figures might even exceed the revised target. It's worth noting that the initial Budget Estimate for FY25 capex was ₹11.11 lakh crore before being revised.
This focus on capital expenditure aligns with the government's efforts to achieve a sharper fiscal deficit target of 4.8% of GDP, a reduction from the previous year's 4.9%. The government has set an even more ambitious goal of reducing the fiscal deficit to 4.4% in the current fiscal year.
Data for the first eleven months of FY25 revealed a capex of ₹8.12 lakh crore, indicating that spending in March alone exceeded ₹2 lakh crore.
Despite global economic headwinds, government officials have indicated that they are unlikely to reduce the capex target of ₹11.21 lakh crore for FY26. They emphasized that investment remains a crucial driver of domestic growth and is expected to remain insulated from the global situation.
This strong emphasis on capital expenditure underscores the government's commitment to infrastructure development and boosting economic growth in the coming years.
