Union Budget 2023-2024: Capex outlay increased by 33%

1 Feb 2023 , 11:54 AM

In the budget speech, FM announced sharp increase in capex outlay for FY24. At Rs 10 lakh crore, public capex will be 3.3% of GDP. This announcement led to an uptick in the 10-year bond yield to 7.38%. 

The 50-year, interest free loan to states for capex purposes has now been increased to Rs 1.3 lakh crore, 30% more than what was allocated for 2022-23. The finance ministry has previously said there has been huge demand for these interest-free loans from states.

The effective capital expenditure of the government has been estimated at Rs 13.7 lakh crore for 2023-24. In contrast, the effective capital expenditure for 2022-23, as per the budget estimate, was Rs 10.68 lakh crore.

It will be important to see if this increase leads to rise in capex by private sector companies.

This is a developing story and will be uploaded regularly