Economic Report: 70 percent increase in government’s capital expenditure, rising inflation is also a matter of concern

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Government’s capital expenditure increased by over 70 per cent in May 2022. The Finance Ministry said in the monthly economic report that after cutting excise duty on fuel, capital expenditure has been increased keeping the fiscal deficit to GDP ratio. In the current situation, this has been possible only with the efforts of the government.

It has been said in the report that the economy is on the path of recovery after recovering from the shocks of Corona. However, risks remain due to unfavorable global conditions. On the inflation front, it has been said that domestic inflation is increasing due to crude oil and commodity prices. The finance ministry said rising inflation could be a deterrent, but strong GST collections, increase in customs duty, increased exports of services and imposition of windfall tax would boost the government’s earnings. It will also help in controlling the fiscal deficit.

To give further impetus to the recovery of the economy, the government is emphasizing on public spending and investment. Finance Minister Nirmala Sitharaman said on Friday, India’s long-term growth prospects are embedded in public capital spending programmes.

In the third meeting of the Finance Ministers of G-20 countries and governors of central banks in Bali, Indonesia, he said, the emphasis has been on capital spending to accelerate economic growth affected by Corona. Private investment will also gain momentum as public spending increases. Capital expenditure for 2022-23 has been increased by 35.4% to ₹7.5 lakh crore.

Expansion

Government’s capital expenditure increased by over 70 per cent in May 2022. The Finance Ministry said in the monthly economic report that after cutting excise duty on fuel, capital expenditure has been increased keeping the fiscal deficit to GDP ratio. In the current situation, this has been possible only with the efforts of the government.

It has been said in the report that the economy is on the path of recovery after recovering from the shocks of Corona. However, risks remain due to unfavorable global conditions. On the inflation front, it has been said that domestic inflation is increasing due to crude oil and commodity prices. The finance ministry said rising inflation could be a deterrent, but strong GST collections, increase in customs duty, increased exports of services and imposition of windfall tax would boost the government’s earnings. It will also help in controlling the fiscal deficit.

To give further impetus to the recovery of the economy, the government is emphasizing on public spending and investment. Finance Minister Nirmala Sitharaman said on Friday, India’s long-term growth prospects are embedded in public capital spending programmes.

In the third meeting of the Finance Ministers of G-20 countries and governors of central banks in Bali, Indonesia, he said, the emphasis has been on capital spending to accelerate economic growth affected by Corona. Private investment will also gain momentum as public spending increases. Capital expenditure for 2022-23 has been increased by 35.4% to ₹7.5 lakh crore.

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