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India's capital expenditure outlook has improved following key state elections, with expectations of increased government and private sector spending in H2 FY25. The government aims for a capex target of Rs 11.11 lakh crore for FY25, building on last year's near Rs 10 trillion expenditure, despite potential minor shortfalls. Experts anticipate that post-election clarity will enhance public infrastructure investments and stimulate private capex growth after Q1 2025.
India's Economic Affairs Secretary Ajay Seth stated that despite some moderation in economic indicators, there is "no downside risk" to the government's growth forecast of 6.5% to 7% for the current year. He noted that while certain sectors are slowing, others are experiencing increased demand, reinforcing confidence in the growth estimate.
DEA Secretary Ajay Seth indicated that while there may be some under-shooting of the FY25 capex target of Rs 11.11 lakh crore, it still represents a significant increase from last year"s Rs 9.5 lakh crore. He noted that some sectors are lagging, but others are experiencing increased demand. Seth remains optimistic about the economic growth rate, estimating it at 6.5-7% for FY25, despite challenges with food prices due to climatic issues.
India aims to quadruple its natural gas usage by 2030 to meet rising energy demands driven by population growth and economic expansion. With over 80% of its energy currently sourced from coal, oil, and biomass, the government is promoting compressed natural gas (CNG) vehicles and expanding piped natural gas connections for cooking. Despite global volatility in gas markets, India is prepared to increase LNG imports to enhance energy security and support domestic fertilizer production.

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