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Union finance minister Nirmala Sitharaman on Thursday denied a charge by the Opposition that the government has achieved its fiscal targets in Union Budget 2025-26 by shifting its focus from capital expenditure, and said that the effective capital expenditure is actually ₹19.80 lakh crore, including the money set aside for this purpose by state-owned firms.

- Rajeev Jayaswal

NEW DELHI:

Replying in the Rajya Sabha to the debate on the budget, the minister explained that effective capital expenditure "includes core capital outlays in the Union Budget and also the grants-in-aid for creation of capital assets to the states. So, though the grants-in-aid for creation of capital assets is accounted as revenue expenditure, in the books of the Union government, yet they go to the states to create capital assets, and, therefore, they are also effectively, eventually, only capital expenditure."

She added: "So, in the budget for 2025-26, which is before us, the effect of capital expenditure is projected at ₹15.48 lakh crore as against ₹13.18 lakh crore in the revised estimate of 2024-25... There is just no reduction in capital expenditure; even more, if we take this together with what is done by the public enterprises (they are independent of the budget)... for the year 2025-26, the capital outlay, which I would define as effective capital expenditure, is likely to be in the range of ₹19.80 lakh crores."