Mumbai: The central government said on Tuesday that it will spend a record Rs 11.11 trillion ($132.85 billion) on infrastructure in the financial year ending March 2025 to support growth and create more jobs in the world's most populous country.
The spending plan was unchanged from the interim budget presented in February before the Lok Sabha elections.
"This would be 3.4 per cent of our GDP (gross domestic product)," Finance Minister Nirmala Sitharaman said while presenting the federal budget.
For the current fiscal, the government has made an outlay of 1.5 trillion rupees for long-term loans to states for infrastructure.
Why it is important
The government has doubled spending on infrastructure over the past three years as a way to boost the economy. As a percentage of GDP), longer-term capital expenditure has risen to 3.4 per cent in the current year from 1.7 per cent in 2019-20.
Infrastructure spending, which generates demand across sectors from cement to steel and creates jobs, has a strong multiplier effect on the economy, economists say.
India's economy expanded at a faster-than-expected pace of 7.8 per cent in the March quarter, but Prime Minister Narendra Modi has faced criticism from analysts and political rivals for not creating enough jobs. This, in turn, has weighed on consumption, which forms 60 per cent of India's GDP, and held back private investment.
India's Nifty realty index extended gains after the government pledged support for urban housing in the budget. The index was last trading 1 per cent higher.
Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.
Published 23 July 2024, 09:38 IST