India commits to record infrastructure spending
24 July 2024
India’s government has used its 2024 federal budget to announce that it will spend a record 11.11 trillion rupees (US$132 billion) on infrastructure in the financial year ending March 2025 to support growth and create more jobs.
The skyline of Mumbai, one of India’s largest cities
The spending plan was unchanged from the interim budget presented in February before the national elections.
This is the first budget of Mr Modi’s third term after he won re-election, albeit with a reduction in votes. Modi’s Bharatiya Janata Party (BJP) failed to achieve an outright parliamentary majority at the election in June.
Finance Minister Nirmala Sitharaman said that the spending of 11.11 trillion rupees was equivalent to approximately 3.4% of the country’s Gross Domestic Product (GDP).
Mr. NS Rao, Group CFO, of Indian-based waste management and infrastructure construction services Ramky Group, said, “We applaud the Finance Ministry and the Indian government’s enduring dedication to economic progress. Their decision to retain the Rs 11.11 lakh crore capex outlay for infrastructure over five years, alongside fiscal support, is warmly welcomed.
“This commitment, along with attracting private investment through viability gap funding and a market-driven financing framework, promises a bright future for infrastructure.”
The India government has increased spending on infrastructure over the last few years – as a percentage of GDP, longer-term capital expenditure has risen to 3.4% in the current year from around 1.7% in 2019-20.
