India's Long-Term Growth Depends On Public Capital Expenditures
News Synopsis
Indian Finance Minister Nirmala Sitharaman said that public capital spending programs were integral to India's long-term growth aspirations. Sitharaman, also an economist, stated that public capital expenditure programs were integral to the country's long-term growth prospects and emphasized the need for increased public spending to attract private investment.
In addition, she added that resources need to be mobilized and deployed right away for health emergencies.
The timing of Sitharaman's speech coincides with the country experiencing severe inflationary pressures, a slowdown in demand as a result of supply chain disruption brought on by the conflict between Russia and Ukraine, and tightening monetary policy.
"There should be an evidence-based policy making which is vital for resilient economic systems," she said while speaking at the 3rd G20 Finance Ministers and Central Bank Governors Meeting hosted by Indonesia in Bali.
In particular following the Covid 19 pandemic, the government has been concentrating on expanding capital investment to push economic growth and revive economic recovery. She stated that "the government needs increased public spending to crowd in private investment."
In order to increase demand, the finance minister increased capital expenditure from the previous year's capex of Rs 5.5 lakh crore to Rs 7.5 lakh crore during the most recent Union Budget in February.
The finance ministry also tweeted during the conference that evidence-based policymaking is essential for robust economic systems and that India's long-term growth prospects are built into public capital spending programs.
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