Union Finance Minister Nirmala Sitharaman on Tuesday hit out at Congress MP and former Union minister P Chidambaram over his claims of a “cut” in capital expenditure, calling them “misleading” and based on “flawed comparisons.” She asserted that rather than being reduced, capital expenditure has increased to ₹11.21 lakh crore for the 2025-26 fiscal year.
Sitharaman was responding to Chidambaram’s social media post, where he stated that the government had cut ₹92,682 crore (Capex BE over RE) and ₹90,887 crore (SASCI BE over RE) for FY25. He further questioned the reasons for the reduction and remarked, “I asked the reasons for the cut. The Hon’ble FM denied there was any cut! I am speechless.”
Earlier in the Rajya Sabha, Chidambaram sought an explanation for the reduction in capital expenditure in the revised budget estimate for FY25, which dropped to ₹10.18 lakh crore from ₹11.11 lakh crore. He also pointed out that special assistance to states was reduced in the revised estimate, declining from ₹3.90 lakh crore to ₹2.99 lakh crore.
In response, Sitharaman clarified that Budget Estimates (BE) are prepared before the financial year begins and naturally evolve into Revised Estimates (RE) based on expenditure trends, implementation capacity, and emerging priorities, which is a standard practice in public finance.
Taking to X (formerly Twitter), she reiterated, “The former Finance Minister @PChidambaram_IN’s claims of a ‘cut’ in capital expenditure are misleading and based on flawed comparisons. Budget Estimates (BE) are prepared before the financial year begins and naturally evolve into Revised Estimates (RE) based on expenditure trends, implementation capacity, and emerging priorities. This is standard practice in public finance.”
Nirmala Sitharaman explains key factors influencing capital expenditure
The Union minister stated that capital expenditure (Capex) in FY 2024-25 was impacted by several factors, including the Model Code of Conduct during the General Elections, extreme weather conditions, and lower-than-expected spending by States and certain central agencies. Additionally, many States failed to submit Utilization Certificates, making it impractical to release further funds. However, she clarified that these adjustments were not due to fiscal constraints.
A year-on-year (YoY) comparison highlights a clear rise in CapEx allocations. The Budget Estimate (BE) for FY 2023-24 was ₹10.01 lakh crore, which increased to ₹11.11 lakh crore in FY 2024-25, marking an 11.11% growth. The BE for FY 2025-26 is set at ₹11.21 lakh crore, surpassing the previous year’s estimate. Similarly, Revised Estimates (RE) indicate a 7.3% increase, with the RE for FY 2023-24 at ₹9.50 lakh crore and for FY 2024-25 at ₹10.18 lakh crore. The minister emphasized that there has been no cut in the Central Government’s Capex.
Since 2021, the Central Government’s Capex outlays have grown exponentially. The Budget Estimates (BE) for Capex over the years are as follows:
FY 2021 – ₹4.12 lakh crore
FY 2022 – ₹5.54 lakh crore
FY 2023 – ₹7.50 lakh crore
FY 2024 – ₹10 lakh crore
FY 2025 – ₹11.11 lakh crore
FY 2026 – ₹11.2 lakh crore
The minister further addressed a starred question regarding spending on the Scheme for Special Assistance to States for Capital Investment (SASCI). The Budget Estimate (BE) for SASCI in FY 2024-25 was ₹1.50 lakh crore, while the Revised Estimate (as of February 1, 2025) was ₹1.25 lakh crore. However, she pointed out that actual releases under SASCI (as of March 26, 2025) stood at ₹1,46,362 crore, surpassing the RE for FY 2024-25. She questioned what there was to be “speechless” about, emphasizing that funding had increased rather than being cut.
“Therefore, Shri @PChidambaram_IN’s selective arithmetic and flawed comparisons between BE and RE of the same year may serve political rhetoric but do little for informed public discourse. The Government’s fiscal prudence stands firm, reflective of ground realities and transparent fiscal management, something perhaps unfamiliar to Shri @PChidambaram_IN ’s from his days in office,” Sitharaman wrote.