India plans to use government investment spending to support strong economic growth. Finance Minister Nirmala Sitharaman told the Reuters NEXT conference on Wednesday, predicting a “very good” economy ahead of the 2024 national elections.
The government will also prioritize health and education, said Sitharaman, who is preparing the national budget due February 1, the last full budget before the election.
“We will continue to push capital spending, and I say that even as I prepare for the next budget,” Sitharaman told the conference. Capital expenditure, she said, “can guarantee good growth.”
As a result, India can expect “very good…growth in the Indian economy this year and next,” she said.
India’s capital expenditure budget for the current fiscal year is already 27% higher than the previous year.
On Wednesday, the government’s top economic advisor forecasted economic growth for the fiscal year to March 31 at 6.8-7%.
Economists have warned, however, that growth momentum may ease in the coming months due to higher interest rates and slowing exports.
Other measures to boost growth include a possible expansion of India’s main industrial incentive scheme beyond the current sectors, which include autos, electronic manufacturing and solar, Sitharaman said
Economic reforms will continue despite the elections, she said.