India Poised to Surpass FY25 Capex Target Amid Growth Optimism
India is likely to exceed its capital expenditure (capex) target of ₹11.1 trillion for fiscal year 2024-25, according to Economic Affairs Secretary Ajay Seth.
Speaking at an event in New Delhi, Seth emphasized that while inflationary pressures exist due to food prices, the government remains confident in its growth projections of 6.5% to 7% for FY25.
Focus on Infrastructure Spending
Infrastructure spending, a key driver of India’s economic growth, has been slower in the current fiscal year, partly due to upcoming national elections. Government data reveals that just over 37% of the capex target for FY25 was utilized between April and September, compared to 49% during the same period last year. Despite this, Seth highlighted the government’s commitment to ramping up expenditure in the second half of the fiscal year.
Inflation and Growth Projections
Retail inflation in October hit a 14-month high, driven by rising prices of edible oils, onions, and tomatoes. Seth acknowledged food prices as a concern but clarified that inflation poses no broader economic challenge. He reiterated the government’s confidence in achieving robust growth, bolstered by strategic capital investments.
Spending Adjustments Under Review
To ensure that the capex target is met, the government is reportedly considering easing quarterly spending limits. This measure aims to accelerate disbursements in critical infrastructure projects, further fueling India’s position as one of the world’s fastest-growing economies.
With this strategy, India’s fiscal and growth trajectory appears firmly on track, reinforcing its economic resilience amid global uncertainties.
