Finance Minister Nirmala Sitharaman on Monday proposed a sharp 34.5 percent hike in capital expenditure for the FY2021-22 to Rs 5.54 lakh crores to push growth.
“In the BE 2020-21, we had provided Rs 4.12 lakh crores for capital expenditure. It was our effort that in spite of resource crunch we should spend more on capital and we are likely to end the year at around Rs 4.39 lakh crores which I have provided in the RE 2020-21,” the minister said while tabling the budget 2021-22 in the Parliament.
“For 2021-22, I propose a sharp increase in capital expenditure and thus have provided Rs 5.54 lakh crores which are 34.5 percent more than the BE of 2020-21,” she said.
Elaborating further on the capital expenditure, Sitharaman said: “Of this, I have kept a sum of more than Rs 44,000 crores in the Budget head of the Department of Economic Affairs to be provided for projects/programmes/departments that show good progress on capital expenditure and are in need of further funds. Over and above this expenditure, we would also be providing more than Rs 2 lakh crores to states and autonomous bodies for their capital expenditure.”
The minister said that the Central government will also work out specific mechanisms to nudge states to spend more of their budget on the creation of infrastructure.
