Higher capital spending is good, but fiscal prudence is essential

An increase in capital outlay results in an expansion in overall investment, leading to better growth outcomes over time

The way government finances are managed in any country has a significant bearing on its long-term growth and development. At India’s current stage of development, government support is necessary in various aspects, including the development of social and physical infrastructure. However, there are Budget constraints and the government has many other demands on its finances, including the cost of its own functioning, and it is important to keep a balance. It is also crucial that the Budget is balanced and that the government does not rely on borrowing excessively to fulfil its obligations. In this regard, a new research article