India steps up public investment push as external risks mount
The Union finance ministry has asked government departments and ministries to prioritise capital expenditure to sustain the flow of productive investment and prevent growth momentum from flagging just as private investment is beginning to revive.
New Delhi: In response to external risks such as rising energy prices and geopolitical tensions, India is boosting its public investment efforts. The Union finance ministry has instructed government departments and ministries to prioritize capital expenditure (capex) and meet their annual targets. Officials have urged other ministries to track project execution more closely and increase spending on capital projects, even amid the need to allocate funds for additional subsidies.
Finance Minister Nirmala Sitharaman reiterated that the Centre will sustain its capital expenditure push without compromising fiscal prudence. The government's focus on capex is crucial as it drives economic recovery and growth, as public investment creates durable assets, generates jobs, lowers logistics costs, and spurs private investment.
India's capex growth has risen from 1.7% of GDP in the pre-pandemic year of FY20 to 3.1% now, with a budgeted target of ₹12.2 trillion for FY27. The Centre has also provided additional tax devolution to states and advanced the November installment of tax devolution to support capital spending.
Written by urgent.news from Live Mint's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
