India's Strategic Borrowing: Focus on Capex with Non-Inflationary Budget

Finance Secretary Tuhin Kanta Pandey emphasizes India's focus on capital expenditure through strategic borrowing, ensuring a non-inflationary budget. Addressing industry leaders, he outlines the comprehensive capex plans and reassures transparent budget allocations, while highlighting government schemes like Jal Jeevan Mission. The fiscal deficit targets are also addressed with precision.

India is strategically channeling its market borrowings towards capital expenditure, maintaining a non-inflationary budget, according to Finance and Revenue Secretary Tuhin Kanta Pandey. Speaking at a post-budget conference organized by FICCI, Pandey highlighted the focus on capex and reassured the industry of the budget's non-inflationary nature.

In the Union Budget announced on February 1, the government outlined plans to borrow Rs 15.4 lakh crore from the market, specifically for capex. Pandey noted that it's unprecedented for the entire borrowing to support capex rather than revenue expenditure. He stressed on a significant Rs 4 lakh crore grant to states in addition to the central capex of Rs 11.21 lakh crore for 2025-26.

Pandey clarified that many initiatives, such as the Jal Jeevan Mission, receive central funding and therefore reflect as grants rather than capex in budget terms. He asserted that no off-budget allocations exist, and the government's fiscal targets, including a revised fiscal deficit target to 4.8 percent for 2024-25 and 4.4 percent for 2025-26, underscore its commitment to fiscal discipline.