InvestorQ : Does the Union Budget 2021 talk about more stimulus for the Indian economy to help it grow faster?
vidhya Laxmi made post

Does the Union Budget 2021 talk about more stimulus for the Indian economy to help it grow faster?

Answer
image
sarah Leo answered.
2 months ago
Follow

Stimulus is surely part of the plan in the Union Budget announced on 01-Feb.The total government expenditure this year stands at Rs.34,50,000 crore, which is nearly 14% higher than last time. as the government has itself admitted, it has been forced to drive spending at a time when consumer spending and industrial expansion has taken a virtual back seat.

One interesting fact is that the government is sinking a lot of money into massive infrastructure projects like roads hoping that the trickle-down effect of such projects will be GDP accretive in the medium term. That has been the experience in the past that the government has had to drive spending at a time when the private sector is tentative.

However, what is to be noted is that the huge surge in borrowings in the previous year to nearly Rs.12 trillion has also pushed up the interest burden in this year. For example, this fiscal the government will end up spending Rs.810,000 crore towards interest cost on debt compared to Rs.693,000 crore last year. That reduces the infrastructure investment surplus available with the government.

0 Views