The National Democratic Alliance (NDA) Government has committed to reviving the investment cycle by increasing public expenditure in capital formation. Finance minister Arun Jaitley announced an overall increase of Rs 70,000 crore in investment in infrastructure in 2015-16 over the current year.
Jaitley said public investment in the new fiscal year will be Rs 1.25 trillion higher than the revised estimates of the last year, of which Rs 70,000 crore will be directed towards capital expenditure. He added that an aggregate annual increase of more than 0.5 per cent of gross domestic product (GDP) can be expected in public capital expenditure. The allocation in the roads sector has been increased by Rs 14,031 crore and that in railways by Rs 10,050 crore. Listing infrastructure as one of the key challenges before the government, Jaitley said that to increase investment in the sector, public investment will to be increased because private sector investment is still muted and the public-private partnership (PPP) model is weak.