Finance Minister Nirmala Sitharaman Announces Big Plans for India’s Future
Finance Minister Nirmala Sitharaman announced that the central government will allocate Rs 11.11 lakh crore for capital expenditure in 2024-25, focusing on infrastructure development. This is an 11.11% increase from the previous year.
Capital expenditure, or capex, is used to set up long-term physical or fixed assets. Sitharaman emphasized the importance of infrastructure investment, stating, “Significant investment the Central Government has made over the years in building and improving infrastructure has had a strong multiplier effect on the economy.”
She added, “We will endeavour to maintain strong fiscal support for infrastructure over the next 5 years, in conjunction with imperatives of other priorities and fiscal consolidation.”
For the fiscal year 2024-25, the fiscal deficit target is set at 4.9% of GDP, with plans to reduce it below 4.5% by 2025-26. The fiscal deficit is the difference between total revenue and total expenditure of the government, indicating the total borrowings needed.
Sitharaman stated, “The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5% next year. The government is committed to stay the course. From 2026-27 onwards we will endeavour to keep fiscal deficit each year such that the central government’s debt will be on a declining path as a percentage of GDP.”
Doubts Revealed
Finance Minister -: The Finance Minister is a person in the government who is responsible for managing the country’s money and economic policies. In India, this person is Nirmala Sitharaman.
Nirmala Sitharaman -: Nirmala Sitharaman is the current Finance Minister of India. She helps make decisions about how the government spends money and plans for the country’s economic future.
Rs 11.11 lakh crore -: Rs 11.11 lakh crore is a very large amount of money. In India, ‘lakh’ means 100,000 and ‘crore’ means 10 million. So, Rs 11.11 lakh crore is 11.11 trillion rupees.
Capital expenditure -: Capital expenditure is money that the government spends on building things like roads, bridges, and schools. These are important for the country’s development.
Infrastructure development -: Infrastructure development means building and improving things like roads, bridges, airports, and schools. These help make life better for people and support the economy.
Fiscal deficit -: A fiscal deficit happens when the government spends more money than it earns. The fiscal deficit target is a goal for how much the government plans to borrow to cover this gap.
GDP -: GDP stands for Gross Domestic Product. It is the total value of all goods and services produced in a country in a year. It helps measure how well the economy is doing.
Private investments -: Private investments are when people or companies spend their own money to start or grow businesses. This can help create jobs and boost the economy.
Fiscal discipline -: Fiscal discipline means managing the government’s money carefully. It involves making sure that spending does not exceed income and keeping debt under control.
