Indian Budget To Be More Focused Over Infrastructural Growth
Come the first day of February India is set to announce its budget for the fiscal starting April 2022. According to economists, infrastructure push is going to be one of the key themes of the forthcoming budget. As South Asia’s largest economy, India has been struggling to get back to pre-pandemic levels of growth.
It has also been braving a third wave amidst talks of a nasal vaccine as well. There has also indicators that investment demand in the country might finally be picking up while pent-up consumer demand fizzles out. On agenda is also challenges like restoring jobs, supporting sectors disproportionately affected by the pandemic, banking sector reforms, climate policies as well as measures for the health and education sectors.
Nirmala Sitharaman, India’s finance minister is likely to present a budget that is going to gear towards meeting the above challenges, apart from boosting overall growth. According to a formal statement made by a Bank of America economist, “She will have to strike a fine balance between the persistent ask for demand stimulus, continued capex push and fiscal consolidation. Further, with a number of Indian states heading to the polls as early as February, there are some simmering concerns that the Feb. 1 budget may turn into a populist one. Despite the polls pressure, we expect [fiscal year 2023] union budget to stick to the reform agenda.”
There are now chances that the many Covid-19 related subsidies will reduce and the money from there and super taxations will be diverted towards some serious toward infrastructural developments. India’s fiscal deficit target for the new year will be closely watched by investors and ratings agencies.
According to formal statement by CitiBank to a leading media house, the government is all set to take state-owned Life Insurance Corporation public this year in what is said to be India’s largest initial public offering.
“Last year, India said it planned to monetize some $81 billion worth of state-owned assets over the next four years to boost infrastructure spending and stimulate growth. The government planned to lease out assets like gas pipelines, roads, railway stations and warehousing facilities to the private sector to operate.” So this fiscal, we can look forward to “visible implementation of the asset monetization pipeline, infra pipeline and disinvestment plans will be high on the government agenda and a key market focus.”