The correct answer is ₹11.21 lakh crore. Explanation & Key Takeaways: • The Government of India, under the leadership of Union Finance Minister Nirmala Sitharaman, has significantly increased the outlay for Capital Expenditure (CapEx) to drive economic growth. • For the upcoming fiscal cycle, the estimated capital expenditure allocation has been set at ₹11.21 lakh crore, which is a substantial rise intended to modernize infrastructure across the nation. • This allocation reflects the government's commitment to the "Viksit Bharat" vision, focusing on long-term asset creation rather than short-term consumption. • The ₹11.21 lakh crore figure represents approximately 3.4% of the Gross Domestic Product (GDP), indicating a massive push towards capital-intensive projects. • This funding is primarily directed toward the Ministry of Railways, Ministry of Road Transport and Highways, and the Power sector to improve connectivity and logistical efficiency. Related Concepts: • Understanding Capital Expenditure (CapEx): • Capital Expenditure refers to the funds used by the government to acquire, upgrade, and maintain physical assets such as roads, bridges, tunnels, and railway lines. • Unlike revenue expenditure, which covers operational costs like salaries and pensions, CapEx has a multiplier effect on the economy, creating jobs and boosting private investment. • The steady increase from ₹10 lakh crore in FY 2023-24 to the current levels demonstrates a consistent strategy of infrastructure-led development. • Fiscal Deficit and Management: • The Ministry of Finance aims to manage this high CapEx while maintaining a path of fiscal consolidation. • The target is to reduce the Fiscal Deficit to below 4.5% by FY 2025-26, balancing growth with financial stability. • Higher Capital Expenditure is often funded through market borrowings, but the resulting asset creation helps in servicing debt through increased tax revenues in the long run. Important Notes: • Support to State Governments: • The Union Budget continues the scheme of 50-year interest-free loans to state governments for capital investment. • An outlay of ₹1.3 lakh crore is often earmarked within these broader schemes to encourage states to undertake urban reforms and infrastructure projects. • Economic Impact: • Investment in Capital Expenditure is expected to crowd-in private investment, which had been sluggish in previous years. • Projects like the PM Gati Shakti National Master Plan are integrated with this funding to ensure multi-modal connectivity across the country. • Large-scale allocations help in the timely completion of national projects like the Dedicated Freight Corridors and Expressways.