NEW DELHI: Prime Minister Narendra Modi's government presented to Parliament on Wednesday an annual budget of $550 billion that calls for ramping up capital spending by 33% to spur economic growth and create jobs ahead of a general election next year.
Finance Minister Nirmala Sitharaman said private investment was rising after the pandemic and the government should focus on driving growth.
[caption id="attachment_33117" align="alignnone" width="1000"]
A vegetable seller takes rest at a wholesale vegetable market in Guwahati, India, on Wednesday, February 1, 2023. Photo: AP via RSS[/caption]
India's economy is projected to grow 7% in the fiscal year ending in March. The government forecasts growth of 6%-6.5% next year. But the government is struggling to generate enough jobs for its population of 1.4 billion people.
"The budget makes the need once again to ramp up the virtuous cycle of investment and job creation," Sitharaman said.
India's economy surpassed that of the United Kingdom last year to become the world's fifth-largest. Its population is expected to overtake China's in size this year.
[caption id="attachment_33116" align="alignnone" width="1000"]
A man on his tricycle carries transports vegetables at a wholesale market in Guwahati, India, on Wednesday, February 1, 2023. Photo: AP via RSS[/caption]
Despite steady economic growth, the Modi government has struggled to dismiss unemployment concerns and is under pressure to generate enough jobs, especially as it faces key state polls this year and a general election in 2024 which it is still expected to win.
According to the Centre for Monitoring Indian Economy, the unemployment rate stood at 8.3% in December, up from 6.5% in January 2022.
The government is aiming for a budget deficit of 5.9% of India's gross domestic product (GDP) for the 2023-24 financial year, lower than the 6.4% for this fiscal year.
Despite worries that the world economy is headed for a slump, the finance minister she was confident the country's future was bright. "India is on the right track," she said.
Apart from raising capital spending on construction of schools, airports, heliports and other infrastructure to $122 billion, the budget extended a $24 billion scheme to provide free grains to vulnerable households for one year.
The government will also increase by 66% its spending on providing affordable housing to the urban poor, Sitharaman said, and prioritize "green growth" with a $4.3 billion investment towards helping India meet its goal of going carbon neutral by 2070.
[caption id="attachment_33114" align="alignnone" width="1000"]
Barbers attend to customers on a pavement at a wholesale vegetable market in Guwahati, India, on Wednesday, February 1, 2023. Photo: AP via RSS[/caption]
The budget also announced new tax relief measures aimed at bringing some respite for India's large middle class. But it slashed spending by 30% on India's rural jobs program, a boon for the country's most vulnerable, triggering criticism from activists and the opposition.
On Wednesday, Modi praised the budget as laying a strong "foundation for the aspirations and resolutions of a developed India," and said the government's investment into infrastructure has increased by more than 400% since 2014 when he first became prime minister.
Opposition lawmakers chanted "Adani, Adani" at one point, prompting Sitharaman to pause. Political opponents have urged India's market regulator to investigate India's richest man, Gautam Adani, after a US-based short-seller issued a report last week accusing him and his company of stock market manipulation and accounting fraud. The resulting sell-off of Adani-related shares wiped out tens of billions of dollars worth of market value for his business empire.
Critics of the 60-year-old billionaire say his rise has been boosted by his apparent close ties to Modi.
The budget requires approval from both houses of parliament, but it is bound to be enacted as Modi's party holds a strong majority.
By RSS/AP
READ ALSO:
A vegetable seller takes rest at a wholesale vegetable market in Guwahati, India, on Wednesday, February 1, 2023. Photo: AP via RSS[/caption]
India's economy is projected to grow 7% in the fiscal year ending in March. The government forecasts growth of 6%-6.5% next year. But the government is struggling to generate enough jobs for its population of 1.4 billion people.
"The budget makes the need once again to ramp up the virtuous cycle of investment and job creation," Sitharaman said.
India's economy surpassed that of the United Kingdom last year to become the world's fifth-largest. Its population is expected to overtake China's in size this year.
[caption id="attachment_33116" align="alignnone" width="1000"] A man on his tricycle carries transports vegetables at a wholesale market in Guwahati, India, on Wednesday, February 1, 2023. Photo: AP via RSS[/caption]
Despite steady economic growth, the Modi government has struggled to dismiss unemployment concerns and is under pressure to generate enough jobs, especially as it faces key state polls this year and a general election in 2024 which it is still expected to win.
According to the Centre for Monitoring Indian Economy, the unemployment rate stood at 8.3% in December, up from 6.5% in January 2022.
The government is aiming for a budget deficit of 5.9% of India's gross domestic product (GDP) for the 2023-24 financial year, lower than the 6.4% for this fiscal year.
Despite worries that the world economy is headed for a slump, the finance minister she was confident the country's future was bright. "India is on the right track," she said.
Apart from raising capital spending on construction of schools, airports, heliports and other infrastructure to $122 billion, the budget extended a $24 billion scheme to provide free grains to vulnerable households for one year.
The government will also increase by 66% its spending on providing affordable housing to the urban poor, Sitharaman said, and prioritize "green growth" with a $4.3 billion investment towards helping India meet its goal of going carbon neutral by 2070.
[caption id="attachment_33114" align="alignnone" width="1000"] Barbers attend to customers on a pavement at a wholesale vegetable market in Guwahati, India, on Wednesday, February 1, 2023. Photo: AP via RSS[/caption]
The budget also announced new tax relief measures aimed at bringing some respite for India's large middle class. But it slashed spending by 30% on India's rural jobs program, a boon for the country's most vulnerable, triggering criticism from activists and the opposition.
On Wednesday, Modi praised the budget as laying a strong "foundation for the aspirations and resolutions of a developed India," and said the government's investment into infrastructure has increased by more than 400% since 2014 when he first became prime minister.
Opposition lawmakers chanted "Adani, Adani" at one point, prompting Sitharaman to pause. Political opponents have urged India's market regulator to investigate India's richest man, Gautam Adani, after a US-based short-seller issued a report last week accusing him and his company of stock market manipulation and accounting fraud. The resulting sell-off of Adani-related shares wiped out tens of billions of dollars worth of market value for his business empire.
Critics of the 60-year-old billionaire say his rise has been boosted by his apparent close ties to Modi.
The budget requires approval from both houses of parliament, but it is bound to be enacted as Modi's party holds a strong majority.
By RSS/AP
READ ALSO:
Published Date: February 1, 2023, 12:00 am
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