A roadmap for an ambitious Rs 100 lakh crore infrastructure plan for the next five years to increase rail, road, air and digital connectivity and provide housing for all will be among key highlights of the first Budget of Prime Minister Narendra Modi government’s second term.
The plan, which can have a “multiplier effect” on economic growth and job creation, is likely to be rolled out by Finance Minister Nirmala Sitharaman in her first Budget on July 5, and is being prepared keeping in mind a GDP growth of 10% by 2024 and above 7.5% in the current year (2019-20) as against 6.8% in the previous year.
India’s economic growth slumped to a five-year low of 6.8% in 2018-19, presenting the first big challenge to the Modi government, whose first five years were marred by a dismal record in job creation. Though for the full year India remained the fastest growing major economy in the world, its growth rate of 5.8% in the fourth quarter was way behind China’s 6.4%.
“A bulk of the spending is being planned for the transport sector followed by housing, agriculture, education and health. This will have a multiplier effect on overall economic growth and job creation,” an official told DH.
High on the Budget agenda will be the financial sector reforms, with an emphasis on non-banking finance companies (NBFCs), which have seen a slowdown in demand in housing and automobile sectors among others and loss of jobs.
The Budget is likely to spell out ways to reduce short-term borrowing cost for NBFCs and housing finance companies, which have moved from one crisis to another since the IL&FS default in September last year.
“Funds are also expected to be allocated for connecting gram panchayats with high speed optical fibre network under the government’s digital push,” the official said, adding the move will ensure development of villages and jobs for countryside youth.
The finance minister, who has been crowd-sourcing ideas for her Budget, has also lined up meetings with stakeholders on their expectations from the Budget. Starting Tuesday, the minister will meet agriculture bodies, industry experts, India Inc, trade bodies, economists and other stakeholders for their suggestions.
