Interim Budget 2024: Capex Target Raised to ₹11.11 Lakh Crore, Fiscal Deficit to Reduce
What is capex?
Capex, short for capital expenditure, refers to the funds a company invests in acquiring, maintaining, or improving fixed assets such as property, equipment, infrastructure, or technology. These expenditures are typically made to enhance the capacity or efficiency of the business or to extend its productive life. Capex is considered a long-term investment and is recorded as an asset on the company's balance sheet, rather than being expensed immediately like operational expenditures.
2024 Budget Update on capex
In a bid to invigorate India's economic growth, Finance Minister Shrimat Nirmala Sitharaman unveiled the Interim Union Budget for 2024-25 in Parliament today, revealing an 11.1% surge in capital expenditure. The allocation now stands at ₹11,11,111 crore, equivalent to 3.4% of the GDP. This strategic move aligns with the government's overarching goal of propelling economic advancement and fostering employment opportunities. It also builds upon the remarkable achievement of tripling capital expenditure over the past four years, showcasing a steadfast commitment to sustainable progress and development.
Fiscal Deficit after Budget 2024
Fiscal deficit refers to the variance between government expenditure and income. For FY24, the fiscal deficit has been narrowed to 5.8%, down from the estimated 5.9%. Moving forward, the target for 2024-25 has been set at 5.1%, lower than the revised budgeted figure for 2023-24. The objective is to reach a fiscal deficit target of below 4.5% by 2025-26.
IMF Report on Indian Economy
The International Monetary Fund (IMF) forecasts India's ascent to the position of the third-largest economy by 2027, marking a substantial contribution to global economic expansion. Supported by optimistic projections from renowned international bodies such as the World Bank, IMF, OECD, and ADB, India's growth trajectory is anticipated to range between 6.1% and 6.7% in the fiscal year 2024-25. These estimations underscore India's increasingly pivotal role in shaping the future landscape of the global economy.
Summary
In the fiscal year 2024-25, total receipts, excluding borrowings, are estimated at ₹30.80 lakh crore, while total expenditure is projected to be ₹47.66 lakh crore, with tax receipts expected to reach ₹26.02 lakh crore. Budget 2024 sets forth a vision to transform India into a "Viksit Bharat" by 2047, highlighting a comprehensive approach to development across diverse sectors.
(Internal Research)