01076nam a22001097a 4500008004100000100002400041245003400065260001200099300003000111520081300141773001200954220704b           ||||| |||| 00| 0 eng d  aYadav, Sajjan Singh  aHarnessing multiplier effect   aYojana   a66(3), Mar, 2022: p.25-28  aIn the union budget 2022-23, the finance, minister Nirmala Sitharaman unveiled a trans formative approach to invigorate demand and accelerate economic growth. The approach relies on boosting capital expenditure, both by the public and the private sector. Capital expenditure is non-recurring, long-term expenditure on creation and acquisition of capital assets. Why is capital expenditure so critical? Studies say that capital expenditure has a multiplier effect of 2.45 in the short run and 4.8 in he long term. ‘Simply put, this means that Rs. 1  crpre spend on capital  is likely to add Rs. 2.45 crore to the gross domestic product (GDP) in the short term. Cumulative impact of this investment on GDP in the long term is likely to be Rs. 4.8 crore. What is behind this multiplier effect. – Reproduced   aYojana