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Finance Minister Nirmala Sitharaman highlighted the Indian government's massive infrastructure spending of INR 43.5 trillion between 2014-2023, which boosted GDP growth and lowered logistics costs. A study cited by the minister estimated that every INR 1 spent on capital expenditure increases economic output by INR 4.80 due to the multiplier effect on consumption and investment. Better road connectivity from expanded networks was estimated to potentially lower annual logistics costs by INR 2.4-4.8 trillion. The increased infrastructure spending reflected in capex rising to over 21% of total spending in 2023-24 from 12% in 2013-14.
Finance Minister Nirmala Sitharaman highlighted the massive infrastructure spending by the NDA government over the last decade, which she said boosted economic growth and lowered logistics costs for businesses. Advertisement
The government allocated INR 43.5 trillion for infrastructure development between 2014-2023. This spending had a multiplier effect that boosted GDP growth through higher consumption and investment. It also improved long-term efficiency by reducing logistical bottlenecks, as per an NIPFP study cited by the minister. The study estimated that every INR 1 spent on capital expenditure increases economic output by INR 4.80.
Sitharaman noted there was potential savings of INR 2.4-4.8 trillion annually in logistics costs due to expanded road networks. Better connectivity attracts investment and supports local businesses by improving market access and lowering transportation costs, she added.
Capital expenditure as a proportion of total spending rose to over 21% in 2023-24 from just 12% in 2013-14, reflecting the increased focus on infrastructure. The Gross Budgetary Support for capex since 2014 was 3.72 times higher than 2004-2014.
Key achievements included a 500% increase in road transport allocation since 2014. The national highway network expanded 60% between 2014-2023 versus 39% from 2004-2014. Railway capex allocation in 2023-24 was 30 times higher than 2004-05 and 8 times more than 2013-14 levels.
Upcoming projects like the Delhi-Mumbai Expressway and Zojila tunnel will significantly reduce travel times and offer all-weather connectivity, according to the minister. She also noted modernization drives across Indian Railways with modern stations, trains, facilities and technology. The massive infrastructure spending of the past decade has thus laid the foundation for stronger economic growth and competitiveness in the future.
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