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Increase in capex outlay, extension of NMP timeline expected, ET Infra

Nirmala Sitharaman

HYDERABAD: Finance Minister Nirmala Sitharaman in her budget speech last year continued with the government’s push on increasing infrastructure-focused capital expenditure outlay from the previous years. That momentum is expected to continue well into the Interim Budget for 2024-25.

While for 2023-24 (Apr-Mar), finance minister increased the capital investment outlay by 33% year-on-year to Rs. 10 lakh crore, the same is expected to rise up to Rs. 11 lakh crore – Rs. 12 lakh crore, keeping in mind the strong multiplier effect infrastructure spending have had on the economy, which have helped recovery post-pandemic.

While ICRA expects the interim budget to target a gross capital expenditure at Rs.10.2 lakh crore in 2024-25, CareEdge Ratings anticipates an overall announcement between Rs. 11 lakh crore to Rs. 12 lakh crore, with continued focus on infrastructure.

“Considering this is an interim budget, it is quite unlikely that the government will make any major announcements. Having said that, with a strong multiplier effect that infra spending has on GDP at 2.5x, the focus on creating infrastructure is expected to remain as it has been for the last 4-5 years. The thrust is likely to remain on transportation and multi-modal logistics development,” said Rajashree Murkute, Senior Director at CareEdge Ratings.

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“ICRA expects the GoI’s (Government of India) capex to undershoot the FY2024BE (Budget Estimates) (Rs 10 trillion or Rs. 10 lakh crore) by Rs 0.75 trillion (Rs. 75,000 crore), implying a robust 26% YoY growth, albeit lower than 35.9% growth in FY2024BE over FY2023 Prov (provisional),” said Chintan Dilip Lakhani, Vice President & Sector Head-Corporate Ratings at ICRA.


The National Monetisation Pipeline was conceived on the philosophy of ‘Creation through Monetisation’. However, last year’s budget was mostly quiet on its progress. Analysts expect that the interim budget will have an update on its progress and will likely see extension of its time frame.

“With just over a year to go for the FY2025 timeline of the National Monetisation Plan, which is co-terminus with the NIP (National Infrastructure Pipeline), an announcement regarding the asset monetisation to raise the targeted Rs 6 lakh crore capital, including a likely extension, for achievement of the balance target, is expected,” said Lakhani.

According to stakeholders, in several infrastructure sectors including airports, monetisation of assets which were in the pipeline are expected to gather pace only post the general elections due in April-May.

In continuation of last year’s push by the central government to nudge the urban local bodies to improve their finances, the interim budget is expected to further outline steps to incentivize the municipal corporations to broaden their tax base, according to Murkute.

  • Published On Jan 22, 2024 at 01:48 AM IST

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