Piyush Goyal: Enhanced capital spending in Budget to have 3-4 times multiplier effect on the economy

7 Feb 2022 , 10:48 AM

Union Minister for Commerce & Industry, Textiles and Consumer Affairs, Food & Public Distribution Piyush Goyal said that the Union Budget 2022-23 has laid a focus on demand stimulus and that the enhanced capital spending would lead to greater demand and job opportunities.

The minister addressed these during an industry interaction on the Union Budget, at the Bombay Stock Exchange in Mumbai, on February 5, 2022.

“Capital expenditure has been raised by 35%, to more than Rs. 7.5 lakh crore. Rs. 1 lakh crore is being given to states as interest-free 50-year loan to support funding of infra projects. Centre and states together, we are looking at Rs. 10.5 lakh crore of public spending.” The Minister said that the enhanced capital spending of Rs. 10.5 lakh crore provided in the Budget 2022 is expected to have at least a 3-4 times multiplier effect in economic activity.

The Minister noted that import figures were rising, indicating a revival of demand. He added, together with the CAPEX thrust provided by the government, this opens up huge opportunities for businesses to expand and look at new business avenues.

Goyal said India was showing rapid recovery in terms of tax collections, industrial output, consumer demand. He said in the Budget 2022-23, there are no new taxes, no new revenue generation measures. The government has forecast conservative revenue estimates. ‘We don’t over-commit while ensuring needs of every department’s expenditure needs, he added.

Union Minister further said Budget 2022 has provided sufficient funding so that economic growth continues to be above 8% in next year and hope to look at least two decades of growth, ensuring prosperity can flow to everyone.

Furthermore, the Minister exhorted the merchandise sector and services sector to go for a race to the top. The merchandise exports target which stands at $ 400 billion and service exports which stands at $ 240 billion should each aim to reach $ 1 trillion, he said. He shared that “despite the pandemic, our services export this year will cross $ 240 billion, the highest ever in India’s history.”

The Minister recalled that to determine India’s export target PM did a first-of-its-kind bottom-up approach in consultation with industry and foreign missions in 180 countries. Minister was glad to inform that as of 31st January, India has already achieved $ 336 billion of exports, thanks to 10 months of continuous $ 30 billion-plus exports.