Budget 2024: Capex Outlay Rises For 4th Consecutive Year By 11.1% To Rs 11.11 Trillion

During her budget statement today, Finance Minister Nirmala Sitharaman said that capital outlay has been increased to Rs 11.11 trillion. This represents an increase of 11.1% above the Rs 10 trillion that was set aside in the previous financial year to develop projects beginning on April 1. After growing at rates of 24% in FY23 and 40% in FY22, the capex went up by 37% in the current year. Finance Minister Nirmala Sitharaman announced the FY25 budget speech, stating that capital investment outlays are being raised sharply for the fifth consecutive year by 11.1% to Rs 11.11 trillion, or 3.4% of GDP.

"The government increased the capital investment outlay for the 4th time in arow allocating 11.11 lakh crores, up 11.1% The increased investment is poised to stimulate private capital expenditure, which still hasn't picked up the pace as expected. This surge in investment will not only drive economic growth but also create increased employment opportunities, aiding rural India for higher consumption too," said Sanjay Moorjani, Research Analyst at SAMCO Securities.

Union Finance Minister Nirmala Sitharaman stated during her budget statement on Thursday, February 1, that the expected amount of funds to be spent on infrastructure in the fiscal year 2024-25 is 3.4% of GDP. About Rs 10 lakh crore was set aside by FM Sitharaman as capital expenditures for infrastructure development in the Union Budget for FY24, a rise of 33 percent over the previous year.

Gaurav Dua, Head Capital Market Strategy, Sharekhan by BNP Paribas said, "Interim Budget turned out to be a fiscally responsible Budget despite the political compulsion ahead of the national elections. Though the speech did highlight that the government's primary focus is social justice, and the need to provide support to the poor, farmers, youth, and women, the fiscal deficit target of 5.1% for FY2025 and net government borrowing of Rs 11.75 lakh crore (lower than FY2024) has come as a positive for the markets. Bond markets are celebrating the same, with a rally in bond prices and appreciation in INR against USD. This is also good news for the banking system and overall sentiments for the markets. Furthermore, there is an increase of 11.1% in capital outlay with a focus on infra development along with possible measures to attract foreign investments in the Indian economy."

"We continue to retain our positive view on equity markets, and investors should focus on our three key investment themes: Capital (banks, financials), Capex (engineering, real estate, infra), and consumer (auto, hotel, tourism, etc.). Tactically, we believe in better times for pharma, IT services, and PSU banking stocks for the year 2024," he further added.