Finance Minister Nirmala Sitharaman emphasized that capital expenditure (CapEx) is a crucial method to increase consumption. In an interview with NDTV's Editor-in-Chief Sanjay Pugalia, she expressed her strong belief in Prime Minister Narendra Modi's focus on capital expenditure.

"I honestly believe in the PM's emphasis on capital expenditure and public funding of capital asset building. Over the last four years, we have announced significant amounts and focused on implementation and execution.

This approach has undoubtedly benefited the rural economy, driving consumption," Ms. Sitharaman stated.

She reiterated that the spending plan remains unchanged from the interim budget presented in February before the Lok Sabha elections, projecting CapEx at 3.4% of GDP. 

During the presentation of her seventh consecutive Budget, the Finance Minister announced a record ₹11 lakh crore allocation for infrastructure for the financial year ending March 2025. This move aims to support economic growth and create more jobs. 

"We announced ₹11 lakh crore in CapEx and are committed to advancing it. CapEx is a proven way to boost consumption, and this strategy has contributed to our current growth rate," she explained.

The Indian economy grew at a faster-than-expected rate of 7.8% in the March quarter. It achieved an 8.2% growth in the previous fiscal year, with projections of 6.5% to 7% growth for the current fiscal year.

The government has doubled infrastructure spending over the past three years to stimulate economic growth. As a percentage of GDP, long-term capital expenditure has increased from 1.7% in 2019-20 to 3.4% in the current year.

Additionally, states have been allocated ₹1.5 lakh crore in long-term loans to fund infrastructure projects, with some linked to reform milestones in areas such as land and labor, which the government intends to advance in its third term.

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