Skip to content
Search

Latest Stories

India spurs spending on infrastructure in growth budget

India spurs spending on infrastructure in growth budget

INDIA unveiled a bigger budget of Rs 39.45 trillion($529.7 billion) for the coming fiscal year on Tuesday (1), stepping up investment on highways to affordable housing to put growth on a firmer footing as the economy recovers from the pandemic.

The government has projected slower economic growth of 8 to 8.5 per cent compared with an estimated 9.2 per cent for the current fiscal year. GDP contracted 6.6 per cent the previous year.


"The overall sharp rebound and recovery of the economy is reflective of our country's strong resilience," finance minister Nirmala Sitharaman said, vowing to lay the foundation for faster growth.

She announced spending of Rs 200bn ($2.68 billion) for a highway expansion programme and said 400 new trains would be manufactured over the next three years. Total government spending will be 4.6 per cent more than the current year.

The fiscal deficit for the current year would be 6.9 per cent of GDP, slightly more than the 6.8 per cent targeted earlier, Sitharaman said.

For the next fiscal year, India is targeting a deficit of 6.4 per cent of GDP, hoping to build on higher tax revenues and privatisation of state firms including a share sale of giant insurer Life Insurance Corporation.

Prime minister Narendra Modi's government has made building of physical and digital infrastructure a top priority to improve the cost of doing business.

"The touchstone of the master plan will be world-class, modern infrastructure and logistics synergy among different modes of movement of both people and goods, and location of projects," Sitharaman said.

She said the central bank would introduce a digital currency in the next fiscal year using blockchain and other supporting technology.

"Introduction of a central bank digital currency will give a big boost to the digital economy. A digital currency will also lead to a more efficient and cheaper currency management system," Sitharaman said.

India's central bank has voiced "serious concerns" around private cryptocurrencies on the grounds that these may cause financial instability.

Indian 10-year benchmark bond yield rose to 6.7649 per cent after the government said the fiscal deficit for 2021/2022 would be bigger than expected. The blue-chip stock NSE Nifty 50 and S&P BSE Sensex stock indexes jumped nearly 1.5 per cent on a boost in capital expenditure.

The rupee was slightly stronger at 74.54 against the dollar as of 0654 GMT.

"The fiscal outcome is broadly in line with our expectations with the government having continued its focus on infrastructure and rural demand," said Upasna Bhardwaj, senior economist at Kotak Mahindra Bank.

"As expected, the government has refrained from a sharp consolidation. While the fiscal expansion is expected to be pro-growth, the heavy supply is expected to worry the bond markets."

Concerns have also risen about inflation and loss of tens of thousands of jobs because of the disruptions caused by the pandemic. Sitharaman expressed empathy with those who had to bear adverse health and economic affects of Covid-19 that devastated India during the second wave last year.

A government report on Monday (31) warned that growing risks of global inflation led by rising crude oil prices could hit the economy.

(Reuters)

More For You

reeves-spring-statement

To prevent a budget deficit, Reeves has announced cuts to disability welfare payments and reductions in government departmental budgets, citing global economic uncertainty.

Government cuts growth forecast, announces public spending cuts

THE UK government reduced its 2025 growth forecast by half on Wednesday and announced spending cuts to manage public finances amid economic challenges.

The Spring Statement update comes as the Labour government, which won a landslide election in July, faces slow economic growth and rising borrowing costs.

Keep ReadingShow less
Slough Council writes off £382,000 in unpaid business rates

Two companies that owed the money had dissolved, while a third – which owed the largest amount – had gone into liquidation.

CRM

Slough Council writes off £382,000 in unpaid business rates

Nick Clark

AN ‘eyewatering’ £382,000 in unpaid business rates has been written off by Slough Borough Council with the agreement of council leaders – with one branding the sum ‘frightening’.

Leading councillors voted to approve the write off last Monday (17), after all attempts to collect the debt – owed by just three companies – had been ‘exhausted’. Councillor Wal Chahal, responsible for finance, said: “It’s an eyewatering number to be writing off, it’s just frightening.

Keep ReadingShow less
man-city-getty

Last year, Manchester City and Techno India Group launched the first Manchester City Football School in India, based in Kolkata. (Representational image: Getty)

Manchester City signs MoU to open sports school in Bengal: Mamata Banerjee

MAMATA BANERJEE, chief minister of the Indian state of West Bengal, has announced that Manchester City has signed a Memorandum of Understanding (MoU) to establish a sports school in the state.

The Premier League club, which has won the league title for four consecutive seasons, is expanding its football education initiatives in the region.

Keep ReadingShow less
IMF Finalizes £1 Billion Loan Agreement for Pakistan

The IMF said in a statement on Tuesday that the 28-month agreement aims to support Pakistan’s efforts in tackling climate change. (Photo: Reuters)

REUTERS

IMF announces agreement on £1 bn loan deal for Pakistan

The International Monetary Fund (IMF) has reached an agreement with Pakistan on a new £1 billion loan programme and reviewed an existing bailout, which could unlock an additional £770 million if approved.

The IMF said in a statement on Tuesday that the 28-month agreement aims to support Pakistan’s efforts in tackling climate change.

Keep ReadingShow less