Budget should see a 30% increase in infra outlay to make up for lag of this year: Vinayak Chatterjee
Vinayak Chatterjee, Founder & Managing Trustee, The Infravision Foundation, says along with the slowdown in spending, the relatively lower budget increase in infrastructure has impacted GDP growth. In the next six months, the government has to step on the fiscal expenditure pedal and also the Budget pedal. One rupee spent on infrastructure by the government leads to a three-rupee increase in GDP, whereas a one-rupee spent by the government on items like direct benefit transfer (DBT), results in a 90-paisa increase in GDP. So, if the government wants to pump prime the economy for a robust GDP growth, it has to channel money into infrastructure.
As far as Budget expectations are concerned, the government should get back the trajectory of 30% increase in infra Budget of the last many years, excluding FY25. On last year's capex base of Rs 11.1 lakh crore, there should be a 30% increase in the upcoming Budget.
How are you looking at on-ground activity? We have seen a lot of headway being made in the infrastructure sector. Are things on the ground as rosy as they seem?
Vinayak Chatterjee: There is current concern about the slowdown in government capex in the infrastructure sector. In a very interesting article, Dr Rangarajan published earlier this month that contraction in government capital expenditure in the first half has played a major role in the growth decline. Dr Rangarajan very clearly and explicitly has drawn a linkage between the subdued government expenditure, specifically in public works and infrastructure,
