FM increases capex by 34.5% in Budget 2021-22 to Rs 5.54 trillion

In addition, more than Rs 2 trillion will be provided to states and autonomous bodies for their capital expenditure during the year. Indian Railways to spend Rs 1.07 trillion for capital expenditure in 2021-22.
FM increases capex by 34.5% in Budget 2021-22 to Rs 5.54 trillion
New Delhi

Union Finance Minister Nirmala Sitharaman has announced a sharp increase in capital expenditure (Capex) in the Budget 2021-22 with BE (budget estimates) of Rs 5.54 trillion which is 34.5 per cent more than the BE of last financial year Rs 4.12 trillion. The Minister stated that despite the resource crunch it has been Government’s effort to spend more on capital and it is expected -that the total capital expenditure during 2020-21 will be at around Rs 4.39 trillion. 

“The pandemic’s impact on the economy resulted in a weak revenue inflow. Once the health situation stabilised, and the lockdown was being slowly lifted, Government spending was ramped up so as to revive domestic demand. As a result, against an original BE expenditure of Rs 30.42 trillion for 2020-2021, RE estimates are Rs 34.50 trillion and quality of expenditure was maintained. The capital expenditure, estimated in RE is Rs 4.39 trillion in 2020-2021 as against Rs 4.12 trillion in BE 2020-21,” said Nirmala Sitharaman.

In the Capital Budget for 2021-22, a sum of more than Rs 440 billion has been kept in the Budget of Department of Economic Affairs and will be provided for projects/programmes/departments that show good progress on capital expenditure and are in need of further funds. Besides, more than Rs 2 trillion will be provided to states and autonomous bodies for their capital expenditure. The Government will work out specific mechanisms to nudge the States to spend more of their budget on creation of infrastructure, the Minister added. 

Indian Railways, which has already prepared a National Rail Plan for India 2030 to create a ‘future ready’ railway system by 2030, will spend Rs 1.07 trillion for capital expenditure in 2021-22.

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