The Indian government has released the new budget for 2019/2020, which the government claims is aimed at reviving growth and giving a boost to the economy. The newly unveiled budget strives to reverse the weakening growth and investment that were affected during the recent Indian elections.
More infrastructure spending, friendly environments to attract foreign investments, heavy funds for the digital sector, and a clean-up of public debts. These are the major promises made by India’s newly appointed Finance Minister Nirmala Sitharaman in her first budget speech in the Parliament.
India To Become a Giant $5 Trillion Economy
“This new budget is aimed to take India to new heights. We are striving to make India, an Asian giant,” said Nirmala Sitharaman as she presents the budget 2019/2020 in Parliament, the first of Modi 2.0 government.
The Indian government has set a target of taking India’s $2.7 trillion economy all the way up to $5 trillion economy by the end of Modi 2.0 government’s tenure till 2024/2025. “We will invest heavily in infrastructure, digital economy, and job creation, “ the Finance Minister said in her speech, adding India will become a $3 trillion economy in the current year. The government also mentioned that it will achieve the $5 trillion target by following China’s model of savings and exports.
Bold Reforms Are Needed To Shore Up India’s Slowing Economy: “It Could Prove Politically Difficult,” say Analysts…
But senior analysts claim the fast expansion of Asia’s third-largest economy requires courageous moves and reforms, including the liberation of land and labor markets, which Modi scared during his first tenure for fear of political repercussions and backlash.
“Land and labor reforms are difficult in a democracy like India, and it appears possible that Modi will risk attracting the ire from his Bharatiya Janata Party electorates, who have re-elected him with a huge mandate. The Indian economy is also in global headwinds, with economic development slowed down by trade wars and protectionism,” says a senior analyst.
It is to be noted that Asia’s third-largest economy rose only by 5.8% in the last quarter, at a much slower rate than anticipated and the slowest development rate in five years, well below the pace required to create employment each month for millions of young Indians on the labor sector.