Continuing with the trend of recent years, Union Budget 2023-24 proposes a steep increase in capital investment outlay – envisioning capital investment as the driver of growth and jobs. This was stated by Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman while presenting the Budget 2023-24 in Parliament here today.

“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”, Smt. Sitharaman said.

The Finance Minister proposed to increase capital investment outlay for the third year in a row, by 33% to ₹ 10 lakh crore, which would be 3.3% of GDP and almost three times the outlay in 2019-20.

EFFECTIVE CAPITAL EXPENDITURE

Smt. Sitharaman added 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 that this “Effective Capital Expenditure” of the Centre would be budgeted at ₹ 13.7 lakh crore i.e. 4.5% of GDP.

INTEREST-FREE LOAN TO STATES CONTINUED

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 ₹ 1.3 lakh crore.

INFRASTRUCTURE FINANCE SECRETARIAT

The Finance Minister 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, Smt. Sitharaman said that the newly-established Infrastructure Finance Secretariat will assist all stakeholders for more private investment in infrastructure sectors like railways, roads, urban infrastructure and power.

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RM/PC