India’s budget likely to spur spending to support economic growth

India’s budget likely to spur spending to support economic growth

NEW DELHI: India is likely to step up spending on infrastructure, health services and social programs in its annual budget on Tuesday, to try to set the economy on a firmer footing as it fights a spike in COVID-19 cases and rising inflationary pressure. Finance minister Nirmala Sitharaman is expected to announce more spending on roads, railways, besides higher subsidies for affordable housing amid growing public criticism over inadequate relief following the economic disruption after the outbreak of pandemic in 2020. A government report on Tuesday warned that growing risks of global inflation led by rising crude oil prices could hit the economy, while projecting growth of 8 percent to 8.5 percent next fiscal year compared to 9.2 percent in current fiscal year and 6.6 percent contraction in the previous year. The budget comes days before the start of elections in five states, including the most populous, Uttar Pradesh, which could spur Sitharaman to promise higher rural spending and subsidies on food and fertilizer, economists and officials said. “The fiscal position appears much healthier than expected ahead of the (budget) announcement,” said Shilan Shah, economist at Capital Economics, Singapore in a note. The strong revival in revenue receipts, which rose