‘Growth, infra spending are priorities, not fiscal-deficit math’
India is likely to spend more next fiscal year than this year’s budgeted $415 billion and prioritise infrastructure projects, relying on asset sales of about $40 billion for some of the funding, two people with knowledge of the plan told Reuters.
Actual spending in the current fiscal year ending March 31could be lower than the original target of ₹30.4 trillion (₹1 lakh crore = ₹1 trillion), but will be higher than last year’s ₹26.86 trillion, one of the sources said.
“Supporting growth (and) infrastructure spending is the priority now, not fiscal-deficit math,” said one of the sources. “But it is not that the spending will suddenly increase from ₹30 trillion to ₹35 trillion (when) our revenues are falling. The only ways to generate funds are through asset sales and borrowing.”
Both sources declined to be identified as they were not authorised to discuss budget deliberations. The Ministry of Finance did not respond to an email seeking comment.
India had aimed to raise more than $28 billion this fiscal by selling stakes in companies such as Bharat Petroleum, Container Corp. of India, Shipping Corp. of India and Air India, and by listing the Life Insurance Corp., but the pandemic delayed the process.
‘Economy to expand’
Finance Minister Nirmala Sitharaman told Reuters early this month that the economy would expand in the next financial year and that if “I don’t spend now the revival is going to get deferred and we can’t afford that”.
For the current fiscal year, India’s deficit is likely to rise to ₹12 trillion to ₹13 trillion, much higher than the budgeted ₹7.9 trillion, mainly due to a revenue shortfall of ₹5 trillion to ₹6 trillion, said one of the sources.
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