24, February, 2024
HomeIndiaOptimizing Capital Expenditure: Nirmala Sitharaman's Strategy for Accelerated Infrastructure Development

Optimizing Capital Expenditure: Nirmala Sitharaman’s Strategy for Accelerated Infrastructure Development

Published on

Finance minister Nirmala Sitharaman has emphasized the government’s commitment to expediting infrastructure development by strategically investing in shorter-duration projects. Despite the typical long gestation periods of 24 to 36 months for capital expenditure (capex) projects, Sitharaman’s monitoring has revealed that optimal results are achieved when capex is utilized within a 12-month timeframe.

Read Also | Unveiling the Intricacies of Union Budget 2024: Key Components and Fiscal Dynamics

In a recent statement, Sitharaman outlined the government’s plan to fully leverage the highest-ever capital expenditure allocation from the interim budget. The focus is on efficiently utilizing funds to propel the country’s infrastructure growth. The minister stressed that while many capex projects have extended timelines, the key lies in completing them within a year for maximum effectiveness.

The interim budget reflects a significant 11.11% increase in central capex allocation, amounting to ₹11.11 trillion for the upcoming fiscal year. This allocation aims to support and drive various infrastructure projects starting from April 1. Despite the noteworthy increase, the growth rate is comparatively slower than in previous years, attributed to the already elevated capex levels.

Sitharaman addressed concerns about the perceived slowdown, clarifying that the deceleration is a consequence of the substantial growth in capex from ₹3 trillion to ₹10 trillion over recent years. She emphasized that an 11% increase from such a high base is considerable, constituting about 3.4% of the GDP.

Highlighting positive indicators, Sitharaman noted a resurgence in private-sector investment, particularly in sunrise sectors like renewables and those incentivized by productivity-linked incentive (PLI) schemes. She urged a shift in focus from traditional sectors to emerging opportunities, pointing out that investments in sectors like cement and old steel factories are yet to pick up.

Sitharaman also acknowledged a rise in capital expenditure by states, evident in the increased central credit available to them through the 50-year interest-free special assistance scheme, reaching ₹1.3 trillion. She expressed optimism about the scheme’s success, citing its substantial completion in the initial two years. Additionally, she hinted at its potential use by states to finalize projects that have already witnessed significant progress with funds from the union government in the past two years.

Read Also | Modi Government’s 2024-25 Budget Aims for Robust Growth: Increased Capex, Subsidy Rationalization, and Rural Boost

Nirmala Sitharaman’s strategy revolves around optimizing capital expenditure for faster infrastructure development. The emphasis on completing projects within a shorter timeframe and diversifying investments into burgeoning sectors signals a proactive approach towards economic growth and sustainability.

Latest articles

‘Article 370’ – Yami Gautam Dhar’s Political Thriller Eyes a Rs. 5 Crore Opening

Yami Gautam Dhar, a prominent face in Bollywood, returns to the big screen with...

‘The Crew’: Kareena, Tabu, and Kriti Soar High in Bollywood’s Upcoming Comedy Delight

Get ready for a laughter-filled ride as Bollywood's leading ladies, Kareena Kapoor Khan, Tabu,...

Unveiling the Confirmed Cast for ‘The Boys’ Season 4

As excitement builds for the highly anticipated return of "The Boys" on June 13,...

More like this

Chinese Hackers Target India’s Government and Corporates in I-Soon Leak

In a recent and concerning development, a Chinese hacker group with alleged ties to...

Congress Alleges ‘Financial Terrorism’ by Government in Tax and Bank Account Dispute

In a heated exchange, the Congress party has accused the Narendra Modi-led government of...

Congress-TMC Seat Sharing Talks Resurrected: Strategic Alliances for INDIA Bloc Ahead of 2024 Elections

In a significant turn of events, seat-sharing discussions between the Trinamool Congress (TMC) and...
Enable Notifications OK