According to data shared in the Rajya Sabha, the share of capital expenditure in total spending nearly halved from 23% during 2004-05, the start of the UPA’s term, to 12% in 2013-14. The estimate of Rs 1. 1 lakh crore capex in 2004-05 includes repayment of loans to the National Small Savings Fund.
Responding to a question by Sushil Modi in the Rajya Sabha, Sitharaman said that during NDA-II, the share of capex is projected to rise to 19% of the spending, the bud-geted level for the current financial year, while share of subsidies has dropped from 15% in 2014-15 to an estimated 8% this year. The projection for the current year is, however, expected to see an upward revision as the subsidy for fertliser and food is expected to rise in the wake of rising global prices and the government’s decision to cushion the blow of farmers and to extend the free foodgrains scheme until September.
During the last few years, the share of major subsidies has declined partly due to subsidy rationalisation, which includes better targeting, as well as an end to doles for auto fuel and cooking gas. Capex has been a key thrust for the government to revive the economy as it is banking on higher demand for steel, cement and other inputs to generate jobs and result in fresh capacity addition by the corporate sector.