New Delhi: The Finance Ministry has relaxed the rules for expenditure of more than Rs 500 crore. The aim of this initiative is to accelerate capital expenditure. Capital expenditure was low for a few months due to the general elections. Finance Minister Nirmala Sitharaman has proposed to increase the capital expenditure estimate by 11.1 percent to a record Rs 11.11 lakh crore in the 2024-25 budget.

In order to provide operational flexibility in the implementation of budget proposals, it has been decided to relax the rules for release of funds exceeding Rs 500 crore for expenditure in the current financial year, the ministry said in an office memorandum dated September 2, 2024. It said the relaxation granted is subject to strict compliance of the rules by all ministries and departments.

According to the ministry, all plan expenditure and non-plan expenditure should be as per the guidelines of Single Nodal Agency (SNA)/Central Nodal Agency (CNA) and Monthly Expenditure Plan (MEP) and Quarterly Expenditure Plan (QEP) limits prepared by the ministries.

GDP growth declined in the first quarter

In the first quarter of the financial year 2024-25, GDP growth fell to 6.7 percent, which was the lowest in the last five quarters and 15 months. In the same quarter of the previous financial year, the Indian economy grew at a rate of 7.8 percent. The previous low level of GDP growth was 6.2 percent in January-March 2023. One reason for this was also considered to be capital expenditure, which was reduced due to the Lok Sabha elections.

Now the government is focusing on increasing capital expenditure so that along with employment opportunities, the pace of the economy can also be increased. The government itself is increasing expenditure on infrastructure. This is expected to increase demand and consumption in rural areas.