New Delhi, Feb 1 (EFE).- India Tuesday unveiled a nearly 39.5 trillion rupees ($530 billion) budget for the upcoming financial year, proposing to step up its investment in infrastructure building to boost the economy slowed down by the Covid-19 pandemic.
In her budget speech to the parliament, Finance Minister Nirmala Sitharaman vowed to create “world-class modern infrastructure and logistics synergy among different modes of movement – both of people and goods – and location of projects.”
“This will help raise productivity, and accelerate economic growth and development,” Sitharaman told the lower house of parliament where the ruling Bharatiya Janata Party (BJP) holds a massive majority.
The minister said the government would formulate a plan for faster movement of people and goods under which it would expand the national highway network by 25,000 km in 2022-23.
She said 200 billion rupees would be mobilized “through innovative ways of financing to complement the public resources.”
The government would also invest in the railways to develop new products and efficient logistics services for small farmers and small and medium enterprises.
“Four hundred new-generation trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years,” Sitharaman said.
With the help of the investment in infrastructure building, the government intends to uplift the Gross Domestic Product (GDP) growth prospects.
The government has estimated that the growth in the current fiscal, which ends Mar.31, would be 9.2 percent.
The government expects a slower growth rate of 8 or 8.5 percent next year.
India suffered a contraction of 7.3 percent in the previous fiscal due to coronavirus-induced lockdowns.
The second wave of the virus also hit the industry in April-May last year.
The stepped-up public spending will not come for free.
Before the pandemic, India had hoped to reduce the fiscal deficit to 3.5 percent.
It has now set a goal of keeping it below 4.5 percent by 2025-26.
Sitharaman said the fiscal deficit would be 6.9 percent of the gross domestic product (GDP) at the end of the current year.
She estimated that in 2022-23, it would stand at 6.4 percent.
The minister said the country would auction the next generation spectrum this year “to facilitate the rollout of 5G mobile services within 2022-23 by private telecom providers.”
In another major highlight of her nearly three-hour budget speech, Sitharaman said the Indian central bank would introduce a digital currency next fiscal year using blockchain and other supporting technology.
“Introduction of Central Bank Digital Currency (CBDC) will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,” she said.