New Delhi: Continuing with the trend of recent years, Union Finance Minister Nirmala Sitharaman on Wednesday said the Union Budget 2023-24 proposed a steep increase in capital investment outlay, envisioning capital investment as the driver of growth and jobs.
“This substantial increase in recent years is central to the government’s efforts to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds,” she said while presenting the budget in the Parliament here.
The Finance Minister proposed to increase capital investment outlay for the third year in a row, by 33 percent to Rs 10 lakh crore, which would be 3.3 percent of GDP and almost three times the outlay in 2019-20.
Sitharaman also stated that the direct capital investment by the Centre is complemented by the provision for creating capital assets through Grants-in-Aid to States.
She said this “Effective Capital Expenditure” of the Centre would be budgeted at Rs 13.7 lakh crore, either 4.5 percent of GDP.
To spur investment in infrastructure and to incentivize states for complementary policy actions, the Finance Minister proposed to continue the 50-year interest free loan to state governments for one more year – with the outlay in this regard being enhanced significantly to Rs 1.3 lakh crore.
Sitharaman in her Budget 2023-24 speech noted that after the subdued period of the pandemic, private investments are growing again.
To attract private investment in sectors predominantly dependent on public resources, she said the newly-established Infrastructure Finance Secretariat will assist all stakeholders for more private investment in infrastructure sectors like railways, roads, urban infrastructure and power.
