by Megha Bahree
February 1, 2022
https://www.aljazeera.com/economy/2022/ ... r-the-poor
Introduction:
Here is The National's take on this same topic: https://www.thenationalnews.com/busines ... inflation/. It includes a lot of repetition of what is in the Al Jazeera article, but also includes additional comments.(Al Jazeera) India has promised to spend more in the upcoming financial year to keep the engines of its economy running but with no direct handouts for the millions of poor.
On Tuesday, Finance Minister Nirmala Sitharaman outlined plans to spend 39.45 trillion rupees ($529.7bn) for the coming fiscal year that starts on April 1, up from 37.7 trillion rupees ($515.5bn) a year ago, where she promised to step up investments in building highways and railways but did not offer any direct giveaways for the poor or the middle class to spur consumption.
“It’s an investment-oriented budget but there’s not much on consumption,” Madan Sabnavis, chief economist at Bank of Baroda, told Al Jazeera. “There’s an investment approach to growth … and there’s nothing for households, despite two successive years of high inflation.”
And while the big-ticket investments in infrastructure, like roads and ports, will no doubt help boost those sectors, and ultimately the economy, there needs to be an increase in private sector investment for long term growth “but that happens only when consumption increases,” warns Sabnavis.
“What the economy needs right now is demand boost,” says Devendra Pant, chief economist at India Ratings & Research, a Fitch unit. “Has the budget been able to give that kind of boost to demand, especially for the rural areas that are struggling with weak demand …? Chances are very less.”