Budget 2021: Finance Minister Proposes Sharp 34.5% Hike In Capital Expenditure

The Finance Minister Nirmala Sitharaman has proposed a sharp 34.5 per cent hike in capital expenditure to Rs 5.54 lakh crore in financial year 2022 in order to push growth. The massive increase comes at a time when the country is looking to recover from the Covid pandemic, as rising government spending is key to bringing the economy back on track.

The government will also provide an additional Rs 2 lakh crore to states for capital expenditure over and above its own commitment. "We will also work out specific mechanism to nudge states to spend more of their Budget on creation of infrastructure,” Ms Sitharaman said.

The finance minister said that the government will launch a national asset monetisation pipeline which includes the sale of oil and gas pipelines, power transmission lines and operation of toll roads under the National Highway Authority of India.

This year's budget, according to the government, rests on six pillars: health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and research and development, and "minimum government, maximum governance," the finance minister had asserted. And capital expenditure is an important component that drives teh growth.