Post budget 2022-23, India’s big spending on infrastructure has been acknowledged by the Western media, which are normally critical of the union government. However, they castigate the government for the high fiscal deficit; cut in the budgets for social and welfare schemes and are also apprehensive that deficit financing may lead to high borrowing and high interest rates and eventually inflation.
India’s budget 2022-23:has recorded a steep rise of 35.4 per cent in capital expenditure; mainly to finance infrastructure projects. The aim is to create productive assets like roads bridges ports, airports etc; ensure more jobs, crowd in investment and push growth. However the western media points out that the huge spending on building roads, railways, bridges, ports, airports, etc will not bring in expected economic growth immediately.
Infrastructure spending means there is a gestation period for its positive effect to trickle down. Economists quoted by Western media houses feel that currently household incomes are low, and the government should do something to increase it. Government is resorting to Increasing taxes on fuel, to find money for spending. But increased taxes means rise in prices and the result is buying will slow down.
Counterarguments
The counterargument raised by those who support the government is after the agriculture construction sector, construction sector is the largest employer in India. Around 12 percent of the total workforce in India are employed in construction industry. As agricultural sector is a seasonal employer. agricultural labourers migrate in search of jobs after harvest and it is the construction industry that absorbs them.
Regarding the expected high fiscal deficit of 6.4 percent in 2022, they point out that large economies like the US, the UK and China have significant deficit. The US and the UK state deficits run over 11 percent of their GDP. The US deficit was US $ 2.77 trillion in 2021 where as it was a record $ 3.1 trillion in 2020, which was 15.2 percent of the GDP..
Funds allotted for the roads sector has been hiked significantly in the current budget. Ministry of Road transport and Highways has been allotted 1.99 lakh crore in this budget compared to 1.18 lakh crore in previous year’s budget. Allocation to the NHAI has risen by 133 percent this year.
Allocation for Pradhan Mantri Gram Sadak Yojana has been increased from Rs 14,000 crore in 2021-22 budget to 19,000 crore in 2022-23 budget. The budget has also earmarked Rs one lakh crore for interest free loans to states to construct infrastructure under Prime Minister’s Gati Sakhti project and construct rural roads.
Supporters of the government also note that the push to affordable housing will boost real estate and construction and create more jobs. The present budget has earmarked Rs 48,000 crore for Pradhan Mantri Awas Yojana (PMAY). for the completion of 80 lakh homes in urban and rural areas.
Great information. Most important is Entrepreneurship Development Program along with infrastructure to allow 67% youth in the country to dream big and try to achieve regularly.
Industries Department & Bank must go hand-in-hand with Government Guaranteed Trust Fund Corporation & Niti Ayog.
Monthly visitation & Encouraging Youths along with finding any hitches & ditches to rectify at war footings