Government Set to Exceed FY25 Capex Target of ₹10.18 Lakh Crore
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Synopsis
The Indian government is expected to surpass its capital expenditure target of ₹10.18 lakh crore for FY25, showing strong commitment towards infrastructure development and economic growth, supported by significant investments in railway and road projects.
Key Takeaways
- Government likely to exceed capex target of ₹10.18 lakh crore for FY25.
- Capex allocation for FY26 set at ₹11.21 lakh crore.
- Indian economy projected to grow by 6.5% in 2025-26.
- Significant progress in railway and road infrastructure projects.
- States' capital outlay expected to rise by 18% to ₹7.2 lakh crore.
New Delhi, April 6 (NationPress) The government is on track to exceed its revised capital expenditure (capex) target of ₹10.18 lakh crore for FY25 by a considerable margin.
As reported by NDTV Profit on Sunday, referencing a senior official, “The data collected to date suggests that we will likely surpass the revised target by a notable amount in absolute terms.”
The capex target was adjusted to ₹10.18 lakh crore (revised estimates) in the Union Budget 2025-26, down from ₹11.1 lakh crore.
For the current fiscal year (FY26), the government has outlined a capex allocation of ₹11.21 lakh crore.
Union Finance Minister Nirmala Sitharaman stated that the Indian economy is set to remain the world’s fastest-growing economy, bolstered by an increase in government capital expenditure in the Budget for 2025-26 and rising consumption levels, particularly in rural areas.
The effective capital expenditure amounts to 4.3 percent of the GDP in the Budget for 2025-26, while the fiscal deficit stands at 4.4 percent.
“This suggests that the government is utilizing all borrowed resources to finance effective capital expenditure, thus generating capital assets,” she highlighted.
The Indian economy is anticipated to achieve 6.5 percent growth in 2025-26, driven by government investments in substantial infrastructure projects and an increase in private investment throughout the year, according to the latest EY Economy Watch report.
A Jefferies report released last month indicated a significant rise in capital expenditure in India, with growth projected to persist in the upcoming months as various sectors experience robust investments.
The government’s prioritization of railway and road initiatives has resulted in notable progress, with approximately 83-87 percent of the financial year 2025 revised estimates already accomplished in these sectors.
The government’s dedication to capital expenditure remains unwavering, with transfers to states increasing by around 60 percent. This financial backing is expected to further expedite infrastructure projects at the state level, enhancing overall economic growth.
The capital outlay of the nation’s top 15 states for FY26 is expected to surge by 18 percent (year-on-year) to ₹7.2 lakh crore, driven by a post-election boost in capital spending, execution of infrastructure projects, and ongoing allocation of ₹1.50 lakh crore to states through interest-free capex loans in the Union Budget 2025-26, as per a CareEdge Ratings report.
