Finance Minister Sitharaman Unveils 433% Increase in Capex Amid Strong Tax Collections

On February 22, 2024, Finance Minister Nirmala Sitharaman revealed that the government, buoyed by strong tax revenues, is set to boost capital expenditure and sustain substantial investments in infrastructure development. She emphasized a remarkable 16.77% increase in gross direct tax collections from April to January compared to the previous year. Sitharaman expressed optimism that the final figures, with two months remaining, would surpass the current levels, speaking at the inauguration of a new Income Tax office building in Gorakhpur.

Sitharaman credited the fiscal strength to the government’s commitment to increasing development spending, disclosing a significant 433% surge in capital expenditure to ₹11.11 lakh crore for the fiscal year 2024-25. She also highlighted the issuance of tax refunds amounting to ₹2.48 lakh crore between April 2023 and January 2024, and acknowledged the reduced timeframe for tax assessments.

A milestone was achieved with the processing of over 1.66 crore income tax returns in a single day for the fiscal year 2023-24. Sitharaman lauded the faceless assessment system for its role in enhancing transparency and reducing complaints by 60%, highlighting the positive impact of technological advancements on tax collections and improving taxpayer services.

In the recent interim budget, she highlighted the withdrawal of outstanding tax demands for amounts up to ₹10,000 (for the years 2010-15) and up to ₹25,000 (for the period up to the financial year 2009-10), benefiting one crore small taxpayers. Sitharaman stressed the effective utilization of taxpayer funds in infrastructure development for the broader benefit of the public. She cited Prime Minister Narendra Modi’s initiatives, such as the revival of a fertilizer factory and the completion of the Saryu River project, benefiting 19 lakh farmers in 6,200 villages across seven districts in Uttar Pradesh.

Sitharaman concluded by emphasizing the current phase in the country, termed ‘kartavya kaal,’ urging everyone to contribute to the goal of building a ‘Viksit Bharat’ by 2047.