As the BJP-led government prepares for the first anniversary of second term, which is due in about a fortnight time, Prime Minister Narendra Modi promised to unveil fiscal stimulus worth Rs 20 trillion over the next few days. Finance Minister Nirmala Sitharaman has announced the first tranche on Wednesday.
Interestingly, in its election manifesto for the 2019 Lok Sabha polls, the Bharatiya Janata Party (BJP) had said its government will make capital investments worth Rs 100 trillion in the infrastructure sector by 2024, which amounts to be an investment of Rs 20 trillion per year.
The manifesto committed to several other measures, which if put in place, could create jobs, put money into people's hands, spur demand and hence kick-start economic revival.
The manifesto stated that the first term of the Modi government managed to squeeze inflation at 4 per cent and cleaned up the banking system. This, it said, has created the space for structural reduction in the cost of capital.
“This will not only help infrastructure investment but investment also in the wider economy. Thus, new India will be built on the basis of investment driven growth,” it stated.
For the MSME (micro, small and medium enterprises), the manifesto promised to provide credit of Rs 1 trillion to the sector by 2024.
The manifesto said the government will double the construction of national highways by 2022, convert all viable rail tracks to broad gauge by 2022, ensure electrification of all railway tracks by 2022, complete the dedicated freight corridor project by 2022 and double the number of functional airports by 2024. It said there were 101 functional airports in 2019.
The manifesto had committed to investment of Rs 25 trillion in the agriculture-rural sector by 2024, and promised to double farm incomes.
The BJP had said it will launch a new scheme to provide collateral-free credit up to Rs 5 million for entrepreneurs, of which 50 per cent loan amount will be guaranteed for female entrepreneurs.
It had planned to increase the PM Mudra Yojana beneficiaries from 170 million to 300 million.
Other public investments it committed to are housing for all and piped water supply to all homes – public investments that could help revive the economy at the current juncture.
The manifesto said these measures will help make India a $5 trillion economy by 2025 and a $10 trillion economy by 2032. With revenues depleting and more lockdowns likely in the months to come, these goals now seem increasingly difficult to attain.
But the prime minister in his address to the nation on Tuesday had said the Covid-19 crisis has also offered India the opportunity to own the 21st century. He had expressed the confidence that India had the ability and demographic dividend of a young population to achieve this goal.