New Delhi: The government on Tuesday proposed to increase its capital expenditure by 35.4 per cent to Rs 7.5 lakh crore to boost public investment. Presenting the budget for the financial year 2022-23, Finance Minister Nirmala Sitharaman said that in order to accelerate the cycle of investment, it is necessary that public investment should encourage private investment. For this purpose, a 2.9 percent increase in Gross Domestic Product (GDP) is being proposed.
Sitharaman said in her budget speech, “At this point of time the need is felt to support private investment to scale up to its potential and make it fit for the needs of the economy. Public investment will have to continue to play a leading role in this to support private investment and demand in 2022-23. He said that the allocation for capital expenditure in the Union Budget is being increased by 35.4 percent from Rs 5.54 lakh crore in the current financial year to Rs 7.50 lakh crore in 2022-23.
“This is more than 2.2 times the capital expenditure of 2019-20. The allocation of capital expenditure for the year 2022-23 will be 2.9 per cent of GDP. He said adding this capital allocation with the provision made as grants-in-aid to states for creation of capital assets, the ‘effective capital expenditure’ of the central government is estimated to be Rs 10.68 lakh crore in the next financial year. This will be around 4.1 percent of GDP.
Sitharaman said that the government will also come out with green bonds with the intention of mobilizing resources for the development of green infrastructure. This will be part of an amount of Rs 11.58 lakh crore to be raised through the government’s debt program in the year 2022-23. He said that the money raised from the green bonds would be invested in public sector projects which would help in reducing the carbon density of the economy.