Parliament Budget Session Live Updates: ‘India’s economy poised to do better in the remainder of this decade,’ says CEA Anantha Nageswaran

After remaining muted for the first seven months of 2022-23, capital spending by states has seen a sharp pickup in November, with 18 major states posting a 49.7 per cent year-on-year increase at Rs 44,647 crore. (Express file photo)

The Centre is likely to renew its thrust on capital expenditure in the upcoming Budget, buoyed by some visible traction in capex spending by states late in the current financial year. After remaining muted for the first seven months of 2022-23, capital spending by states has seen a sharp pickup in November, with 18 major states — including Gujarat, Karnataka, Jharkhand, Uttar Pradesh, Bihar and Odisha — posting a 49.7 per cent year-on-year increase at Rs 44,647 crore.

For the financial year so far till November, these 18 states have seen a rise of 5.7 per cent in their capital expenditure to Rs 2.44 lakh crore, primarily on account of the sharp pickup seen in November, according to official data.

Capital expenditure by these 18 states in November accounts for 18.3 per cent of the overall capital spending during April-November. Capex by states such as Gujarat, Karnataka, Jharkhand, Uttar Pradesh has more than doubled in November as against the corresponding period last year. For states such as Odisha, the rise in capex is nearly five-fold, while for Bihar, it is an over three-fold increase in November.

Union Finance Minister Nirmala Sitharaman with Ministers of State for Finance Bhagwat Kishanrao Karad and Pankaj Chaudhary and officials during the ‘Halwa’ ceremony to mark the final stage of Union Budget 2023-24, in New Delhi, January 26, 2023. (PTI)

This is going to be a crucial week for the Indian economy. To begin with, even before the Union Budget is presented Wednesday, the immediate future of India’s stock markets and the well-being of retail investors is likely to be determined by how the stocks of Adani Group of companies perform on Monday and Tuesday.

Already in 2023, even without the allegations and findings by Hindenburg Research, the Indian stock markets were one of the worst-performing ones anywhere in the world. In particular, foreign investors have been pulling out money from India. The Adani Group, which has already lost billions of dollars in market value in a matter of few days, has issued a detailed rebuttal but it all depends on how investors view it.

Then on January 31st, two key documents will be released. One, is the Economic Survey, prepared by the Chief Economic Advisor. Two, Tuesday will also witness the release of the International Monetary Fund’s latest update of its World Economic Outlook. Both documents will carry pointers about the prospects of India’s economy.

Union Finance Minister Nirmala Sitharaman during the ‘Halwa’ ceremony to mark the final stage of Union Budget 2023-24, in New Delhi, January 26, 2023. (PTI)

Budgets seem to be all about providing largesse to the poor and incentives to the industry while reiterating the constraint of being fiscally prudent. Any talk of addressing the issues confronting the middle class is skipped and never quite addressed. Will this budget be any different?

The problem is that when one is neither poor nor rich, one has to fend for oneself. Most of the expenditure schemes are targeted towards the poor. There is the food subsidy or a free food programme. Farmers are given cash transfers under the PM Kisan scheme and the fertiliser subsidy also percolates to them. There is the MGNREGA which provides employment for the rural folk. There are farm loan waivers. There is also a health insurance scheme (PM Ayushman Bharat) for the poor but not one for the middle class. The discourse on these expenditures revolves around how they are populist or necessary, with the new term, revdi, catching on now.

An all-party meeting convened by the government ahead of the Budget Session saw demands by the Opposition for a discussion on the row over a report by a New York-based investor research firm accusing Gautam Adani’s companies of “brazen stock manipulation and accounting fraud scheme”, as well as on the curbs over the recent BBC documentary on Prime Minister Narendra Modi. The government, led by Defence Minister Rajnath Singh, assured the parties that it was willing to discuss every issue as per the rules, and sought the cooperation of the Opposition in running the proceedings smoothly.

Several Congress MPs, including Leader of Opposition in Rajya Sabha Mallikarjun Kharge, were not able to attend the President’s address due to delayed flights from Srinagar on account of inclement weather. Party leader Jairam Ramesh said several Congress leaders and MPs were in Srinagar for the concluding events of the Bharat Jodo Yatra on Monday.