Govt infra spending rises fivefold since 2014, touches nearly ₹91 trillion
New Delhi: Prime minister Narendra Modi’s government has sharply increased infrastructure spending since coming to power in 2014, with allocations rising to more than five
New Delhi: Prime minister Narendra Modi’s government has sharply increased infrastructure spending since coming to power in 2014, with allocations rising to more than five times the level seen in the decade up to 2014. The Centre's effective capital expenditure, including grants to states for creating public assets, surged to ₹90.87 trillion during 2014-26, from ₹17.04 trillion in the previous decade (2004-2014), underscoring the government's sustained push to use public investment as a driver of economic growth and infrastructure creation. In a written reply to the Lok Sabha on Monday, finance minister Nirmala Sitharaman said the Centre's direct capital expenditure increased to ₹64.70 trillion during 2014-26 from ₹12.39 trillion during 2004-14, while grants-in-aid for creation of capital assets amounted to ₹26.17 trillion over the past 12 years. These grants are provided to states for projects such as school buildings under Samagra Shiksha and houses under the Pradhan Mantri Awas Yojana. Also Read | Govt to widen capex scope from FY28 to include asset upgrades and tech spending Effective capital expenditure refers to the Centre's capital expenditure along with grants-in-aid provided to states and other agencies for the creation of infrastructure assets such as roads, schools and houses.
Monday was the first day of the Monsoon Session of Parliament that will sit till 13 August. Sitharaman informed the house that effective capital expenditure captures both the Centre's own capital spending and grants given to states for asset creation, providing a broader measure of public investment. Grants for creation of capital assets have been accounted for separately since 2010-11, while for 2004-05 to 2009-10, effective capital expenditure has been treated as equal to capital expenditure. Queries sent on Monday to the finance ministry remained unanswered. Investment-led growth focused Experts said the fivefold increase in effective capital expenditure reflects the government's emphasis on investment-led growth. “Public investment in infrastructure builds productive assets that improve connectivity, reduce logistics costs and enhance economic efficiency. Over time, this creates conditions for higher productivity, employment and private investment. While execution remains critical, sustained capital formation can strengthen India's long-term growth potential and support broader economic development,” said Prashant Shah, co-founder and chief executive officer (CEO) of Definedge Securities, a stockbroking and fintech firm.
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