New Delhi [India], July 20 (ANI): The Centre's effective capital expenditure rose to Rs 90.87 lakh crore during 2014-26, more than five times the Rs 17.04 lakh crore recorded during 2004-14, while the government's direct capital expenditure increased to Rs 64.70 lakh crore from Rs 12.39 lakh crore over the same periods, the Finance Ministry informed Parliament on Monday.

In a statement tabled in response to a starred question in the Lok Sabha, Finance Minister Nirmala Sitharaman said the Centre's capital expenditure during 2004-14 stood at Rs 12.39 lakh crore, compared with Rs 64.70 lakh crore during 2014-26, adding that the figure for FY2025-26 is provisional.

The government explained that 'effective capital expenditure refers to expenditure of Central Government for asset creation and includes grants-in-aid provided to the State Governments for creation of assets such as school buildings under Samagra Shiksha, houses under PM Awas Yojana, etc.' In simple terms, effective capital expenditure includes not only the Centre's own spending on creating assets but also the money it gives states specifically for building public infrastructure and other capital assets.

According to the statement, effective capital expenditure increased to Rs 90.87 lakh crore during 2014-26 from Rs 17.04 lakh crore during 2004-14. Of this, Rs 26.17 lakh crore comprised grants provided to states for creating capital assets, while the remaining Rs 64.70 lakh crore was the Centre's own capital expenditure.

The government also highlighted that capital expenditure as a share of GDP has increased over the years, rising from 1.6 per cent in FY2014-15 to 3.2 per cent in FY2023-24 and FY2024-25, before moderating marginally to 3.1 per cent in FY2025-26 (provisional).

Explaining the impact of higher capital spending, the statement said, 'The increase in capital expenditure as a percentage of GDP has led to an increase in infrastructure development including roads, railways, urban infrastructure, energy and digital connectivity.' It added that higher public investment has 'led to improved logistics efficiency, generated employment and crowded-in private investment.' In simple terms, the government said increased spending on infrastructure has helped improve connectivity, create jobs and encourage private companies to invest alongside public projects.

Looking ahead, the government said it will continue to prioritise effective capital expenditure through budgetary allocations, support to states under the Scheme for Special Assistance to States for Capital Investment (SASCI), and initiatives such as the PM GatiShakti National Master Plan, the National Logistics Policy and the PM GatiShakti Public Platform to improve planning and infrastructure delivery. (ANI)