The recent budget’s push to capital expenditure will have multiplier effect in the Indian economy. Do you agree with this view? Comment (200 Words)
Refer - Business Line
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IAS Parliament 3 years
KEY POINTS
· Facing the trade-off between growth and inflation, the Finance Minister chose the former over the latter, and rightly so.
· As the real GDP growth rate for 2022-23 is estimated at 8-8.5 per cent by the Economic Survey 2021-22, the implicit rate of inflation works out to 3.1-2.6 per cent.
· The Budget aims at invigorating aggregate demand through public expenditure, and within it, through capital expenditure.
· While revenue expenditure has gone up by less than a per cent, capital expenditure has surged by nearly 25 per cent. This is besides the Rs 1 trillion grant given to States to increase capital expenditure from their side.
· Emphasis on public capital expenditure, a redeeming feature of the Budget, will have a multiplier effect on income augmentation, employment generation and, consequently, demand rejuvenation.
· So will credit demand. This will also “crowd in” private investment. Capital formation, both public and private, will provide a stepping stone for growth not only in the short-term but also in the long-term.
· The tax on “virtual digital assets” will enable the government to earn revenue while empowering income tax authorities to break new ground in reopening of closed cases.
· Therefore, taxpayers’ money has to be utilised appropriately, especially in a Budget which envisages massive capital expenditure.
KAUSHIK SRINIVASH R 3 years
kindly review,,,,
IAS Parliament 3 years
Try to bring coherence in the answer. Keep Writing.
