The government has allocated Rs 11.1 lakh crore as capital expenditure for the next fiscal year, Finance Minister Nirmala Sitharaman said in her budget speech on February 1, an increase of 11.1 percent.
Brokerages have predicted that there will be a slowdown in capital expenditure growth with focus shifting to alleviating rural stress and addressing the needs of the economically vulnerable.
They emphasized the delicate balance that the government needs to maintain in resource allocation, anticipating a more moderate increase in revenue expenditure by 12-13 percent.
Nuvama emphasized possible support for consumption through initiatives such as rural spending and tax credits. While recommending fiscal prudence, Nuvama expected revenue growth to be around 15-16 percent per annum in 2024.
Jefferies, in its interim Budget preview, expressed a more conservative outlook, forecasting a modest 7-8 percent increase in the government’s capex budget for FY25.