Vivek's Commentary

Budget 2022-2023 by Nirmala Sitaram seeks to increase the Capital Expenditure sharply. It is increased to around 7.5 Lakh crore which is around 2.8-2.9 % of GDP. Economic Survey also suggests that the increase in capital expenditure in previous years has increased the Gross Fixed Capital Formation. Economic Survey also finds that the state outlay of capital expenditure specifically in sectors like medical and public health, urban development is also increased. Indian Railway has also seen an increase in capital expenditure. And it will increase in the next 10 years. The capital expenditure is not actually government spending. It is a part of public saving i.e. part of the revenue that is not used for actual consumption but used for public investment. Such investment can induce another spending.   The capital expenditure is supposed to be counter-cyclic meaning it should increase in crisis (in bad times) and should adjust in good times. The current expenditure includes government spendi