‘Limited scope for high capex allocation’

NEW DELHI: Dismissing the criticism over no increase in capex allocation in the Budget, the Department of Economic Affairs (DEA) secretary Ajay Seth has said that there is enough going on capex.

He said even if the direct allocation have not seen significant rise vis-a-via last year’s budget, effective capital expenditure (after including grant in aid for capital assets) is Rs 15.5 lakh crore, an 18% growth over last year. The budget allocation for capex in FY26 is Rs 11.2 lakh crore, similar to Rs 11.11 lakh crore budgeted in FY25, but a 10% rise over revised estimate of Rs 10.2 lakh crore.

Seth, however, said that there is limited space for going up on capex and the attempt going forward is to maintain it relative to GDP. The effective capex/GDP ratio is 4.3% of GDP, similar to fiscal deficit. “We are effectively spending the whole borrowing on capex,”

Seth said in a post-budget interaction with industrialists in New Delhi on Monday. Seth said the country is far away from a situation when the country has a revenue surplus for spending in capital expenditure. The secretary, DEA, further said the government is trying to increase private sector investment.