10.23% Capex Hike in Budget 2025-26 Reinforces India’s Infrastructure Growth Focus: FM Sitharaman
Finance Minister Nirmala Sitharaman highlights a 10.23% capex hike in Budget 2025-26, emphasizing infrastructure growth, economic expansion, and increased public expenditure to boost India's development.
New Delhi: Finance Minister Nirmala Sitharaman, in a post-budget interview with NDTV, emphasized the Indian government’s continued focus on capital expenditure (capex) to drive economic growth.
The Union Budget 2025-26 has allocated a 10.23% increase in capex compared to the revised estimate (RE) of 2024-25, bringing the total to over ₹11.21 lakh crore. This move underscores the government’s commitment to infrastructure development and economic expansion.
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Massive Capex Allocation to Boost Economic Growth
The finance minister stated that the sustained increase in capital expenditure has played a crucial role in strengthening India’s asset-building efforts.
“Repeatedly, public expenditure on asset building has reached such a level that even a 10.23% growth appears normal,” she said during her conversation with NDTV’s Editor-in-Chief, Sanjay Pugalia.
Highlighting the importance of infrastructure spending, Sitharaman reassured that the government’s emphasis on capex has not diminished despite growing concerns about balancing fiscal priorities. She further noted that the Centre is providing interest-free capex funds to states to ensure uniform development across the country.
Capex as a Percentage of GDP and Fiscal Deficit Projections
The budget projects government spending on capital expenditure to be 4.3% of GDP for the current year. Simultaneously, the fiscal deficit for the upcoming financial year is expected to be 4.4% of GDP, indicating a balanced approach to fiscal management while ensuring economic growth.
Since the COVID-19 pandemic, the Indian government has consistently increased capex allocations by 10-15% annually to enhance infrastructure, boost economic resilience, and create employment opportunities.
Last year’s budget had announced a capex outlay of ₹11.11 lakh crore, and the continued increase in allocation for 2025-26 reaffirms the government’s pro-growth strategy.
Balancing Capex and Consumption to Drive Economic Expansion
Addressing concerns that the latest budget might have shifted its focus solely toward consumption, Sitharaman clarified that the government is ensuring a harmonious balance between capex-driven growth and consumption enhancement.
“If you want economic growth, you need the right instruments and triggers. Over the last five years, we have prioritized capital expenditure for its multiplier effect on the economy. However, boosting consumption is also critical to achieving sustained growth,” she explained.
She further emphasized the importance of recognizing and rewarding honest taxpayers, whose contributions play a vital role in India’s development trajectory.
Focus on Welfare Alongside Infrastructure Development
In addition to infrastructure and economic expansion, the budget also places a strong emphasis on social welfare. Sitharaman highlighted key allocations for health, nutrition, and education, aiming to create a balanced foundation for a ‘Viksit Bharat’ (Developed India).
By maintaining a robust capex allocation, incentivizing state-level infrastructure projects, and addressing consumption growth, the government seeks to ensure holistic economic progress. The Union Budget 2025-26 reaffirms its dual focus on strengthening India’s economic foundation while advancing key welfare initiatives.
