No fiscal constraint on capex; govt’s fiscal prudence firm: FM Sitharaman

Union finance minister Nirmala Sitharaman said on Tuesday that the centra; government’s capital expenditure has increased over the years, including in FY25, despite last year's national elections and that there is no fiscal constraint in this regard.

Sitharaman also said in a social media post that the NDA government’s fiscal prudence stands firm, reflective of ground realities and transparent fiscal management.

The minister said in a social media post that the revised estimate for the Centre’s capital expenditure in FY24 was ₹9.5 trillion, and the same for the financial year that ended on 31 March was ₹10.18 trillion.

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“This clearly indicates an increase of 7.3%. There has been no cut in the capex of the central government,” the minister said.

Sitharaman’s statement is in response to former finance minister and Congress party leader P. Chidambaram’s statement on social media platform X that the Union government’s budgeted estimate (BE) of capital expenditure for FY25 was ₹11.11 trillion, but revised to ₹10.18 trillion in the revised estimates (RE).

Adjustments based on evolving needs

“Budget estimates are prepared before the financial year begins and naturally evolve into revised estimates based on expenditure trends, implementation capacity, and emerging priorities. This is standard practice in public finance,” Sitharaman said.

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“In FY25, capital expenditure was influenced by several factors: the model code of conduct during general elections, extreme weather events, and lower-than-expected spending by states and certain central agencies. Additionally, many states failed to submit utilization certificates, making further fund releases imprudent. Clearly, the revisions were not due to fiscal constraints,” Sitharaman said.

She said the budget estimate for the Union government’s scheme for special assistance to states for making capital investment (SASCI) for FY25 was ₹1.50 trillion, and the revised estimate as on 1 February this year was ₹1.25 trillion, but the actual release was above the revised estimates.

“I have mentioned in the House that the actual releases for SASCI (as of 26 March) in FY25 is ₹1,46,362 crore,” the minister said, adding that this was an increase over the revised estimates.

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The government presented this year’s budget on 1 February, proposing ₹11.21 trillion in capital expenditure and another ₹1.5 trillion to states under SASCI for FY26.