Budget 2018: India on its way to achieving sustained 8% growth, says Jaitley
For 2018-19, the economy is likely to grow at 7-7.5 % as per the Economic Survey tabled in Parliament earlier this week.Updated: Feb 02, 2018 00:51 IST
Focused on agriculture, the rural economy and infrastructure creation, finance minister Arun Jaitley sought to revive India’s growth prospects in his fifth and final budget before the Narendra Modi government faces elections in 2019.
The budget targets 7.2% growth in gross domestic product (GDP) in 2018-19 against 6.5% estimated for 2017-18. With higher exports and services growth, India is on its way to achieving sustained growth of 8%, Jaitley said. “There are signs of revival of investment activity in the economy and the recent pick-up in the growth of fixed investment can be expected to maintain momentum in the coming year,” the finance ministry said in its medium-term fiscal policy statement.
In order to create employment and aid growth, the government’s estimated budgetary and extra-budgetary expenditure on infrastructure for 2018-19 has been increased to Rs 5.97 trillion against estimated expenditure of Rs 4.94 trillion in 2017-18.
Capital outlay on Indian Railways was increased by 32.6% to Rs 53,000 crore while allocation for the ministry of road transport and highways rose 24% to Rs 30,000 crore. In total, capital outlay on the infrastructure sector through gross budgetary support increased 21% to Rs 1.6 trillion.
To support ‘Make In India’ and job creation, the government increased customs duties on many electronic products such as mobile phones, LCD panels and automobile parts.
To address rural distress and double farmers’ income by 2022, the finance minister announced an increase in minimum support price for agricultural produce, and better agricultural and rural infrastructure.
The focus on rural support will help sustain India’s long-term growth trajectory, N Chandrasekaran, chairman of Tata Sons Ltd, said. “The next leg of reforms in agriculture will have to focus on reducing production risk and addressing yield and storage deficiencies to raise competitiveness,” he added.