Beyond Budget Headlines with AKB: Govt should invest in small-gestation projects

In this second episode of our special video series on Budget, A K Bhattacharya talks about fiscal deficit target, government spending and disinvestment goals

Many think that the Narendra Modi government has spent a lot this year, especially to mitigate issues faced by people in the wake of the coronavirus pandemic. It’s true that the government has announced stimulus packages to the tune of Rs 30 trillion. But if one were to make a comparison, the government expenditure this year (till October-end) was roughly the same as last year. Given that expenditure this year was budgeted to be 13 per cent more than last year, the finance minister would be expected to spend more in order to expedite economic recovery. But where should she spend? Infrastructure, many say. Yes, of course the government should spend more on infrastructure, but will that yield immediate benefits? A priority for the government at present should be investing in small-gestation projects for immediate rewards, says Business Standard’s in-house policy wonk A K Bhattacharya in this second episode of our special video series, Beyond Budget Headlines with AKB.

 
N K Singh, the chairman of the 15^th Finance Commission recently said that the government should lay out a range rather than a single fiscal deficit target. Will that be a good idea? And what about the Centre’s disinvestment target? While the aim for this year was an ambitious Rs 2.1 trillion in disinvestment proceeds, the actual mobilisation so far has been just Rs 12,000 crore. How much more might materialise in 2020-21? And what might be required to boost this next year? Watch this video to get answers to all these questions, and more.

To watch the first episode of the series, where AKB assesses whether the next Budget would be pandemic Budget or lockdown Budget, click here.