Union Budget 2022: Govt opts CAPEX push for growth, raises outlay target by 35.4% for FY23

1 Feb 2022 , 04:13 PM

The Finance Minister Nirmala Sitharaman in Union Budget 2022 said that the outlay for capital expenditure in the Union Budget is being stepped up sharply by 35.4% from Rs5.54 lakh cr in the current year to Rs7.50 lakh cr in 2022-23.

In her Budget speech, Sitharaman told that the capital expenditure has thus increased to more than 2.2 times the expenditure of 2019-20 and it would be 2.9% of GDP in 2022-23.

The virtuous cycle of investment requires public investment to crowd-in private investment. For the private investments to rise to their potential and the needs of the economy, the public investment must continue to take the lead and pump-prime the private investment and demand in 2022-23, said the Minister.

With capital expenditure taken together with the provision made for the creation of capital assets through Grants-in-Aid to States, the ‘Effective Capital Expenditure’ of the Central Government is estimated at Rs10.68 lakh cr in 2022-23, which will be about 4.1% of GDP, informed the minister.

Also, Sitharaman announced that sovereign Green Bonds would be issued for mobilizing resources for green infrastructure as a part of the government’s overall market borrowings in 2022-23. The proceeds would be deployed in public sector projects which help in reducing the carbon intensity of the economy.

Further, FM highlighted the role of capital investments in ensuring speedy and sustained economic revival and consolidation by creating employment opportunities, inducing enhanced demand for manufactured inputs from large industries and MSMEs, services from professionals, and helping farmers through better agri-infrastructure.