Mumbai: Finance Minister Nirmala Sitharaman on Tuesday announced a 35.4 per cent increase in capital expenditure outlay for FY 2023 to Rs 7.5 lakh crore to make up for the setback of 2020-21. The outlay has been increased from Rs 5.54 lakh crore in FY 2021-22, the minister said in her Budget speech.
“Capital investment holds the key to speedy and sustained economic revival and consolidation through its multiplier effect. Capital investment also helps in creating employment opportunities, inducing enhanced demand for manufactured inputs from large industries and MSMEs, services from professionals, and help farmers through better agri-infrastructure,” Sitharaman said.
She noted that the economy has shown strong resilience to come out of the effects of the pandemic with high growth. “However, we need to sustain that level to make up for the setback of 2020-21,” the minister said adding “.. the virtuous cycle of investment requires public investment to crowd-in private investment.
At this stage, private investments seem to require that support to rise to their potential and to the needs of the economy.” Noting that public investment must continue to take the lead and pump-prime the private investment and demand in 2022-23, Sitharaman said, “the outlay for capital expenditure in the Union Budget is once again being stepped up sharply by 35.4 per cent from Rs 5.54 lakh crore in the current year to Rs 7.50 lakh crore in 2022-23. This has increased to more than 2.2 times the expenditure of 2019-20.
his outlay in 2022-23 will be 2.9 per cent of GDP.” With this investment taken together with the provision made for creation of capital assets through grants-in-aid to states, the effective capital expenditure of the Central government is estimated at Rs 10.68 lakh crore in 2022-23, which will be about 4.1 per cent of GDP, the minister said.