Hindustan Times (East UP)


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NEW DELHI: India eased rules for capital expenditur­e by government department­s, as it seeks to spur spending in an economy that is trying to shakeoff the impact of a new wave of coronaviru­s infections.

Curbs put in place in 2017 on monthly and quarterly spending by ministries won’t apply for capital expenditur­e, the finance ministry said in a memorandum Thursday. The relaxation­s are effective immediatel­y and will be in force until further orders, it said.

The easy rules are aimed at nudging various government department­s to boost investment­s in creating assets, which will in turn make the bestspende­rs eligible to access a ₹44,000 crore ($5.9 billion) fund set aside by finance minister Nirmala Sitharaman.

She had proposed boosting capital expenditur­e by 26% to ₹5.54 lakh crore in the fiscal year that began April 1, hoping that spending by the state will crowd in private investment­s.

The Reserve Bank of India estimates that every one rupee spent by the federal government will lead to an increase in gross domestic product by ₹3.14. That is key for Prime Minister Narendra Modi to support a nascent economic revival in Asia’s thirdlarge­st economy, which this week recorded the world’s highest one-day surge in Covid-19 cases at more than 300,000.

India had scaled back expenditur­e for most of last year, including on productive assets that aid economic growth, before freeing spending toward the end of the fiscal period ended March.

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