The Union Budget will likely focus on expanding capital investment in several sectors, including infrastructure, construction, manufacturing, and green energy, according to Dr. Trilochan Tripathy, Professor of Finance at XLRI. Finance Minister Nirmala Sitharaman is set to present the Union Budget in Parliament on Tuesday. Over time, the central government has increased capital expenditure by around 30 percent annually, and this year, a significant shift is anticipated, Dr. Tripathy noted.
"India will definitely grow at a faster rate because the whole government's focus is on promoting capital expenditure," he told PTI. "The overall capital expenditure is expected to grow by about 50 percent for the 2024-25 fiscal." In the upcoming Union Budget, the finance minister is expected to set an optimistic growth target of over 7.5 percent, surpassing recent forecasts of 7 percent by the International Monetary Fund (IMF) and the Asian Development Bank (ADB), he added.
To achieve this growth target, Dr. Tripathy emphasized the need for a broad-based allocation of resources across sectors. He expressed hope that the Budget will focus on expanding capital investment in areas such as infrastructure, construction, manufacturing, green sustainable energy, clean energy technologies, and defense and aerospace, identifying these sectors as prospective growth drivers for the economy.
In addition, Sitharaman is likely to formulate policies to encourage private-sector participation. India is well poised for development in the defense sector, with the government focusing on increased investment in areas like ports, railways, and aviation, Dr. Tripathy, who is also an Assistant Dean at XLRI, pointed out.
The Centre could offer incentives or tax breaks to private players for investment in defense production and supplies and implement special schemes to attract MSMEs and startups to support the sector, he added.
