Nirmala unveils higher spending on infrastructure

India’s government will step up spending to 39.45 trillion rupees ($529.7 billion) in the coming fiscal year to build public infrastructure and drive economic growth, it said, but it involves a wider fiscal deficit than targeted and record borrowing.

Asia’s third-largest economy has been on the mend after the government lifted mobility measures in June to curb the spread of coronavirus, after contracting 6.6% in the previous fiscal year, Reuters reported.

Finance Minister Nirmala Sitharaman, presenting the annual budget to parliament, said total government spending in the 2022/23 fiscal year beginning in April will be 4.6% more than the current year.

Trillions of rupees will be allocated to expressways, affordable housing and solar manufacturing to put growth on a firmer footing, she said.

Growth is estimated to be 9.2% for 2021/2022, coming off a low base and slowing to 8 to 8.5% in the coming fiscal year, still the fastest among the world’s major economies.

The recovery from the pandemic has been swift but incomplete, officials say. Private consumption has been hampered by a lack of jobs, depleted household balance sheets and wider income inequalities.

Sitharaman said public investment must continue to take the lead and pump prime private investment and demand.