India targets infrastructure spending in growth budget

KEY POINTS

• Indian Finance Minister Nirmala Sitharaman said on Tuesday that her budget for 2022/2023 will lay the foundation for economic growth through public investment as Asia's third-largest economy emerges from a pandemic-induced slump.
• The government has projected growth at 8% to 8.5% compared with an estimated 9.2% for the current fiscal year and a 6.6% contraction the previous year.
• "The overall sharp rebound and recovery of the economy is reflective of our country's strong resilience," Sitharaman said, as she began her budget speech in parliament that will lay out spending, tax collections and the fiscal deficit.

Cloudy weather can be seen with the city traffic in Kolkata, India on January 12, 2022.

Indranil Aditya | NurPhoto | Getty Images

Indian Finance Minister Nirmala Sitharaman said on Tuesday that her budget for 2022/2023 will lay the foundation for economic growth through public investment as Asia's third-largest economy emerges from a pandemic-induced slump.

The government has projected growth at 8% to 8.5% compared with an estimated 9.2% for the current fiscal year and a 6.6% contraction the previous year.

"The overall sharp rebound and recovery of the economy is reflective of our country's strong resilience," Sitharaman said, as she began her budget speech in parliament that will lay out spending, tax collections and the fiscal deficit.

She announced spending of 200 billion rupees ($2.68 billion) for a highway expansion program and said 400 new trains would be manufactured over the next three years.

Prime Minister Narendra Modi's government has made building of infrastructure a top priority to improve the cost of doing business.

"The touchstone of the master plan will be world-class, modern infrastructure and logistics synergy among different modes of movement of both people and goods, and location of projects," Sitharaman said.

Shares rose in the run-up to the federal budget on expectations of greater public spending.

Concerns, though, have risen about inflation and loss of tens of thousands of jobs because of the disruptions caused by the pandemic. Sitharaman expressed empathy with those who had to bear adverse health and economic affects of COVID-19 that devastated India during the second wave last year.

A government report on Monday warned that growing risks of global inflation led by rising crude oil prices could hit the economy.