Finance Minister Nirmala Sitharaman has called on India Inc. to increase investment to help the economy move forward in the “four engines” of growth. He added that the government will continue to focus on government spending to pump-prime the economy. “My priority is public spending on infrastructure and ensuring that states get a share of their infrastructure spending,” the minister was speaking at an event hosted by CNBC TV18 Group in Mumbai.
The Centre’s budget cap for the next financial year is set at Rs 7.5 trillion, which is 36% higher than the revised estimate (RE) of the current year, although its total expenditure budget will increase very little by 4.6%, indicating a desire for improvement. The ‘value’ of the cost.
The minister pointed out not only government spending, but also two other pillars of the economy, such as spending and exports, but private investment, the fourth pillar, is set to weaken as corporate India is wary of new investments.
He noted that the Indian economy was doing well before the Russia-Ukraine crisis. There are a number of challenges now due to the new situation. Reduce the supply of natural gas (one of them). “
He added: “Since our fossil fuel dependence is so high, there is a clear commitment to move towards renewable energy. Conversion with natural gas is now a challenge due to low supply and rising costs.
The minister said the government was assessing the situation and India’s commitment to climate change was about to be fulfilled. He said the high prices of metals and sulphate could not have been a factor at all before the crisis. “We have to be ready. Prices are not going down in the near future. These are the challenges. “
The revenue deficit in FY23 is projected to be 6.4% of GDP, down from 6.9% in the current fiscal year to 6.8% of the original budget. Unlike in the past, FY23’s budget focused on holding state governments in the hands of creating capital assets, the minister said earlier.
The Center has provided interest-free loans of Rs 1 trillion to the states for capital expenditure, which is 4% of the GSDP, more than the debt fixed by the state government. The new focus of the budget on capital expenditure is aimed at advancing private investment.
India Ratings believes that higher commodity prices, especially the use of crude oil, will further reduce demand and risk the long-awaited revival of the private corporate investment cycle.