Union Budget 2022 - Betting Big On Infra

The Modi government wants to put the country on a high-growth trajectory by opening the purse strings for infrastructure development rather than offer palliatives. But effective implementation holds the key to achieving this ambitious objective

- M.G. Arun, Shwweta Punj & Anilesh S. Mahajan

When finance minister Nirmala Sitharaman set out to plan Union Budget 2022-23, the challenges before her were humongous. Top on the list was finding ways and means to create jobs for the 53 million who were unemployed as of December 2021, as per data from the Centre for Monitoring Indian Economy (CMIE). Much of the devastation was caused in 2020-21 when two waves of the pandemic wrecked the Indian economy and pushed it into degrowth—dire straits last experienced only 40 years ago. It had crippled businesses across sectors, more so the MSMEs (Micro, Small & Medium Enterprises) that accounted for the bulk of employment.

35% Increase in capital expenditure compared to the budgeted expenditure of last financial year35%

Meanwhile, fuel and food inflation reared its ugly head, driven by a steep rise in international prices of crude oil, bringing misery to consumers. On the brighter side, the economy was lately showing signs of recovery, though somewhat stymied by the third Covid wave caused by the Omicron variant. The economy grew 8.4 per cent in the second quarter of the current fiscal but was nowhere near its potential for growth.

SITHARAMAN HAS FOCUSED MUCH OF THE CAPEX ON THE ‘SEVEN ENGINES OF GROWTH’: ROADS, RAILWAYS, AIRPORTS, PORTS, MASS TRANSPORT, WATERWAYS AND LOGISTIC