Enhanced capital spending in the Budget will have 3-4 times multiplier effect on the economy: Union Minister Piyush Goyal

Union Minister exhorts the merchandise industry and service industry to go for a race to the top to reach 1 trillion dollar in exports

Union Minister for Commerce & Industry, Textiles and Consumer Affairs, Food & Public Distribution Shri Piyush Goyal said that the Union Budget 2022-23 has laid a focus on demand stimulus and that the enhanced capital spending would lead to greater demand and job opportunities.

“Capital expenditure has been raised by 35%, to more than ₹ 7.5 lakh crore. ₹ 1 lakh crore is being given to states as interest-free 50-year loan to support funding of infra projects. Centre and states together, we are looking at ₹ 10.5 lakh crore of public spending.” The Minister said that the enhanced capital spending of ₹ 10.5 lakh crore provided in the Budget 2022 is expected to have at least a 3-4 times multiplier effect in economic activity.

The Minister said this during an industry interaction on the Union Budget, at the Bombay Stock Exchange in Mumbai on, February 5, 2022.

The Minister noted that import figures were rising, indicating revival of demand. He added, together with capex thrust provided by government, this opens up huge opportunities to businesses to expand and look at new business avenues.

Union Minister Shri Goyal said India was showing rapid recovery in terms of tax collections, industrial output, consumer demand. He said in the Budget 2022-23, there are no new taxes, no new revenue generation measures. The government has forecast conservative revenue estimates. ‘We don't over-commit, while ensuring needs of every department's expenditure needs’, he added.

Union Minister further said Budget 2022 has provided sufficient funding so that economic growth continues to be above 8% in next year and hope to look at least two decades of growth, ensuring prosperity can flow to everyone.

Detailing the focus on PM Gati Shakti National Master Plan in the Budget, Union Minister Shri Goyal said that the Plan will help us plan infrastructure projects more intelligently, and also reducing logistics costs.

Shri Goyal said India did not let down a single international obligation even during COVID19 period. ‘Thanks to Digital India and thrust given for broadband expansion, we were able to continue to provide services to any part of the world”, he added.

The Minister exhorted the merchandise sector and services sector to go for a race to the top. The merchandise exports target which stands at $ 400 billion and service exports which stands at $ 240 billion should each aim to reach $ 1 trillion, he said.

Commerce and Industry Minister shared with the industry that despite the pandemic, our services export this year will cross $ 240 billion, the highest ever in India's history.

The Minister recalled that to determine India's export target PM did a first-of-its-kind bottom-up approach in consultation with industry and foreign missions in 180 countries. Minister was glad to inform that as of 31st January, India has already achieved $ 336 billion of exports, thanks to 10 months of continuous $ 30 billion plus exports.

While interacting with the representatives of the Gems and Jewellery industry, Shri Goyal said that Jewellers’ registration has been made lifetime.

Commerce Minister exhorted the industry to take up this exports challenge. He said noting that the world is not for the meek, but for bold people. ‘When all of us work together with our collective wisdom and efforts behind the New India we are working for, I have no doubt that we are looking at a developed and prosperous India, as we look at India @ 100 in 2047’ he added.

Capital spending multiplier boosts demand and jobs; enhanced public investment to spur infrastructure led growth and export expansion. Enhanced public capital spending in the Union Budget is advanced as the principal demand stimulus, with elevated central allocations and long term interest free loans to states to finance infrastructure projects and a projected multi fold multiplier effect on economic activity. The Budget maintains no new tax measures and conservative revenue estimates while prioritising PM Gati Shakti led infrastructure planning to reduce logistics costs. Industry is exhorted to expand exports and services, supported by administrative reforms such as lifetime jeweller registration and record services export performance.