Capital Expenditure Rises: Finance Ministry's Commitment to State Investments

Finance Minister Nirmala Sitharaman announced an increase in capital expenditure to Rs 11.21 lakh crore for 2025-26, dismissing claims of cuts. Loans to states have similarly increased under a special assistance scheme. However, questions arise over reduced budget estimates for earlier years, specifically in assistance to states.

In a reassurance to the nation, Finance Minister Nirmala Sitharaman declared on Tuesday that capital expenditure for the fiscal year 2025-26 had increased to Rs 11.21 lakh crore, countering allegations of potential cuts. She emphasized that loans to states for capital expenditure had risen in tandem, reflecting the government's sustained investment strategy.

Responding to inquiries during a Rajya Sabha session, Sitharaman provided historical context by outlining previous budget allocations. While the initial capital expenditure estimate for 2024-25 was Rs 11.11 lakh crore, revised estimates showed a drop, sparking concerns voiced by senior Congress leader P. Chidambaram. The revised estimates reduced the fiscal allocation significantly, prompting further scrutiny from critics.

Sitharaman detailed the workings of a special assistance scheme introduced in 2020-21, offering interest-free loans for capital expenditure. Despite the initial framework, variations in approved and released amounts have been noted—with 2024-25 figures showing approval of Rs 1,53,673 crore against a release of Rs 1,46,362 crore. The processes involved digital monitoring to ensure funds' utilization, although immediate tracking posed challenges. Tamil Nadu's allocations across years were highlighted, noting their non-participation in specific reform initiatives.

(With inputs from agencies.)