The Centre’s capital expenditure has grown exponentially since FY21 and gone up in FY25 as well, despite the reduction in the revised estimate due to factors beyond the government’s control, such as general elections and extreme weather events.
With government departments already overstretched due to the loss of time during the general elections and a massive increase in annual public investment after the pandemic, the Centre revised down the capex outlay for FY25 to Rs 10.2 lakh crore capex — a shortfall of around 8% from the budget target of Rs 11.11 lakh crore. However, the FY25RE is still higher by 7.5% compared with Rs 9.49 lakh crore in FY24.
The Centre’s capex has been pegged at Rs 11.21 lakh crore for 2025-26, underscoring the focus on public capex to boost economic activity.
Stating that former finance minister P Chidambaram’s allegation of a ‘cut’ in capital expenditure was “misleading and based on flawed comparisons”, Sitharaman said “in 2024-25, capital expenditure was influenced by several factors: the Model Code of Conduct during general elections, extreme weather events, and lower-than-expected spending by states and certain central agencies.”
Additionally, many states failed to submit utilization certificates, making further fund releases imprudent. The revisions were not due to fiscal constraints, she said.
Budget estimates are prepared before the financial year begins and naturally evolve into revised estimates based on expenditure trends, implementation capacity, and emerging priorities. This is standard practice in public finance, she added.
On spending on the Scheme for Special Assistance to States for Capital Investment (SASCI), the minister said it may be noted that the BE for SASCI of FY25 was 1.5 lakh crores, the RE was 1.25 lakh crores.
“I have mentioned in the House that the actual releases for SASCI (as of 26.3.25) in FY 24-25 is Rs. 1,46,362 crores. This is an increase over FY25RE,” she recalled.
The government’s fiscal prudence stands firm, reflective of ground realities and transparent fiscal management, she added.
Separately, speaking at the launch of ‘NITI NCAER States Economic Forum’ portal, she said the portal is a comprehensive repository of data on social, economic and fiscal parameters, research reports, papers and expert commentary on state finances for a period of about 30 years (1990-91 to 2022-23).
The portal will facilitate an understanding of macro, fiscal, demographic and socio-economic trends; easily accessible data and user-friendly format and will also address the ongoing need for consolidated sectoral data in one place, she said.
It will also provide a forum to policymakers, researchers, and others interested in alluding to the data for informed debates and discussions, she added.