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Union Budget 2025: RBI MPC member emphasises need to focus on capex, infrastructure spending

Union Budget 2025: Union Finance Minister Nirmala Sitharaman will present the budget for the next fiscal year on February 1. Two years ago, she had started laying extra emphasis on capex and infra spending. The RBI MPC member Nagesh Kumar urged to continue with that momentum.

Edited By: Shubham Bajpai New Delhi Published : Jan 19, 2025 19:13 IST, Updated : Jan 19, 2025 19:13 IST
Union Budget 2025
Image Source : X@NAGESHKUM/PTI RBI MPC member Nagesh Kumar (Left), Nirmala Sitharaman (Right)

Reserve Bank of India (RBI) Monetary Policy Committee (MPC) member Nagesh Kumar said on Sunday that Union Finance Minister Nirmala Sitharaman needs to focus on capital expenditure (capex) and infrastructure spending in the Union Budget 2025 to spur economic growth and make it more sustainable.

Kumar, an eminent economist, noted that sustaining infrastructure expenditure and building it further would be very helpful for creating a much more robust trajectory of economic growth for India. He said, "In the context of the slight economic slowdown that we observed in the second quarter, and overall, there is a need to boost growth and make it more robust, more sustainable."

Sitharaman started emphasising capex, infra two years ago: MPC member lauds FM

"The finance minister would do well to continue this momentum (in Budget 2025-26), which she herself started two years ago, of putting great emphasis on capex, infrastructure spending and increasing it to very healthy levels," he said in an interview with PTI.

He further said, "Because after suffering from the COVID pandemic, the Indian economy suffered a lot, after that it showed a robust recovery, but this pent up demand which drove the Indian economic growth for the past few years, is now coming to an end," he said.

"And so then the Indian economy is back to the trajectory which was there in pre-COVID times, and it now needs to be given a little bit of a boost to public spending," he added. 

Union Budget on February 1

Notably, Sitharaman is set to present the Union Budget for fiscal year 2025-26 on February 1. The budget arrives amidst global economic uncertainties and moderating domestic growth. In her last year's budget, she had said that the government will provide Rs 11.11 lakh crore for capital expenditure for 2024-25 and introduce viability gap funding to spur private investment in infrastructure.

(With inputs from PTI)

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