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A key feature of Finance Minister Nirmala Sitharaman’s Budgets has been the steady rise in the government’s capital expenditure. From about 1.67 per cent in 2019-20, the share of the government’s capital expenditure in gross domestic product, or GDP, rose steadily in the following years — to 2.15 per cent of GDP in 2020-21, 2.53 per cent in 2021-22, and to 2.67 per cent in 2022-23. In the current financial year, it is budgeted to rise to 3.3 per cent of GDP. The last time the government’s capital expenditure had crossed the level of 3 per cent of GDP was almost two decades ago in 2004-05.
This was creditable, not least because a smaller increase in the government’s capital expenditure could