India is increasing spending in its latest budget ahead of elections

NEW DELHI, Feb 1 (Reuters) – India’s government on Wednesday unveiled a $550 billion budget for the next fiscal year that starts on April 1, with a plan for record capital spending as it reins in a fiscal deficit.

Prime Minister Narendra Modi’s party, which faces elections in key states this year and a national vote in 2024, is under pressure to create jobs in the country of 1.4 billion people, where many struggle to find work and decent pay.

Below are some key figures in charts from the budget presented by Finance Minister Nirmala Sitharaman.

WHERE WILL THE MONEY COME FROM TO FUND THE EXPENDITURES?

The government is targeting revenue growth of 12% to 26.32 trillion rupees.

TAX REVENUE

For the year, the government is targeting 11.4% growth in net tax revenue to 23.3 trillion rupees.

MARKET LOANS

Gross loans in the market are estimated at 15.43 trillion rupees ($189 billion), while net loans are estimated at 11.81 trillion rupees.

Net borrowings exclude Rs 781 billion in bonds given to states as compensation for GST shortfalls, reducing payments due next year.

New Delhi also aims to exchange 1 trillion rupees worth of bonds next year, after exchanging 1.03 trillion rupees worth of bonds this year.

RECORDS OF SALE

The government expects to raise 510 billion rupees from the sale of stakes in various state-owned companies.

QUANTITIES EXPENDITURE

The government raised its spending target by 7.5% to R45.03 trillion for 2023/24.

CAPITAL EXPENDITURE

The government will spend 10 trillion rupees on long-term capital expenditure in 2023/24, extending the strategy adopted to revive growth after the COVID-19 pandemic.

The allocation is higher than the 7.5 trillion rupees budgeted for the current year. The year-on-year increase of 33% follows last year’s jump of 35%.

BASIC SUBSIDIES

The government cut core subsidies by 28% to 3.75 trillion rupees for the next fiscal year.

FISCAL DEFICIT

The government will target a budget deficit of 5.9% of GDP for 2023/24, down from 6.4% this year. A Reuters poll pegged the budget deficit at 6% of GDP.

($1 = INR 81.8150)

Compiled by Aftab Ahmed; Editing by Kim Coghill

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