India budget leans on public works

NEW DELHI – Indian Prime Minister Narendra Modi's government included hefty spending on roads, airports and other infrastructure in an annual budget presented to Parliament on Tuesday, looking to spur growth and improve its popularity just ahead of key state elections.

The budget for the coming fiscal year, which starts on April 1, calls for $533 billion in spending, up from $477 billion in the current year, Finance Minister Nirmala Sitharaman said in presenting it to lawmakers.

“The economy has shown resilience to come out of the pandemic. We need to sustain the level of growth,” Sitharaman said.

She said the new infrastructure investments were part of the government's economic blueprint for the next 25 years.

The budget would set the fiscal deficit at 6.4% of gross domestic product. It calls for spending $2.7 billion on highway expansion and $6.4 billion on housing for the poor. It includes spending on new roads and airports and an emergency credit line guarantee scheme for small and mediumsized businesses.

India is Asia's third-largest economies and is one of the fastest-growing in the world. Growth is forecast at 9.2% for the current fiscal year after a 7.3% contraction the year before, its worst performance in 40 years. The government has projected growth for the coming fiscal year at 8% to 8.5%.

Rising vaccination rates helped instill confidence in reopening businesses after a devastating wave of coronavirus infections swept through the country in the spring of 2021.

But while the economy has bounced back, many jobs disappeared, with the unemployment rate rising to 8% .