Tag: GDP

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Europe

Finland cuts GDP growth forecasts for 2023, signalling recession

Finland’s exports will also benefit from this growth. However, the loss of Russian markets will leave a permanent gap in exports…reports Asian Lite News

Finland’s Ministry of Finance has marked down its economic prognosis for 2023. It now predicts a 0.2 per cent GDP decline. Back in September, it projected growth of 0.5 per cent.

“It is difficult to see a path on which growth does not slow in Finland. The risk of a recession is clear, but an even greater risk is remaining locked in old structures and the resulting underutilisation of resources,” Mikko Spolander, Director of the Ministry’s Stability Unit, said on Tuesday.

Finland’s GDP is expected to grow by 1.9 per cent in 2022, decrease by 0.2 per cent in 2023 and increase again by 1.2 and 1.4 per cent in 2024 and 2025, respectively, Xinhua news agency reported.

The country’s GDP began a slight decline in autumn, and weak economic performance is expected to continue over the winter, the Ministry said in a statement on Tuesday.

A broad rise in prices has cut households’ purchasing power as incomes have not kept pace with prices. However, inflation will slow in 2023 and income growth will accelerate. The economy will recover in 2024 but will not return to the growth track that was previously forecast due to the conflict between Russia and Ukraine, it added.

According to the Ministry, the economic situation in the eurozone is very similar to that in Finland. However, most eurozone countries are suffering from the energy crisis more than Finland because natural gas plays a much greater role in their energy production.

Despite the slowdown in economic growth, the growth in world trade has been brisk and will accelerate after 2023. Finland’s exports will also benefit from this growth. However, the loss of Russian markets will leave a permanent gap in exports.

The employment rate is at a record high at the end of 2022. The number of job vacancies is also quite high. In 2023, the number of employed people will decrease by about 12,000, and the unemployment rate will rise to 7 per cent. Despite the slump, the employment rate will remain strong and begin to grow again in 2024, it said.

The forecast assumes that economic sanctions and the effects of the Russia-Ukraine conflict will remain similar, the Ministry said. New developments in Ukraine may cause significant and rapidly spreading effects on the economy. Should this occur, economic employment growth would be weaker than estimated. On the other hand, the end of the conflict and the start of reconstruction would have significant positive effects on the economy.

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-Top News UAE News

UAE’s real GDP to grow by 5.9% in 2022

UAE liberalises visa rules

Recent bilateral free trade agreements with Asian partners supported by strong oil exports will place the UAE’s current account surplus at 11.2 percent of GDP in 2022…reports Asian Lite News

The World Bank has hailed the UAE’s “favourable business environment and world-class infrastructure”, expecting the country’s real GDP to grow by 5.9 percent in 2022.

This came as the World Bank announced its new Gulf Economic Update (GEU) where it said higher oil receipts supplemented with a gradual non-oil recovery in the Emirates will bolster fiscal revenue resulting in a fiscal surplus to hover around 4.4 percent of GDP in 2022.

Recent bilateral free trade agreements with Asian partners supported by strong oil exports will place the UAE’s current account surplus at 11.2 percent of GDP in 2022, according to the report. However, the bank expected the real GDP to moderate to 4.1 percent in 2023 as slower global demand may dampen growth due to tightening financial conditions.

According to the GEU, the economies of the Gulf Cooperation Council (GCC) are projected to expand by 6.9 percent in 2022 before moderating to 3.7 percent and 2.4 percent in 2023 and 2024.

“Easing of pandemic restrictions, and positive developments in the hydrocarbon market drove strong recoveries in 2021 and 2022 across the GCC. Strong economic recovery and supply chain bottlenecks raised inflation in the GCC to an average rate of 2.1 percent in 2021 — up from 0.8 percent in 2020.”

Supported by higher hydrocarbon prices, the report continued, the GCC region is “expected to register strong twin surpluses in 2022 and continue over the medium term. The regional fiscal balance is projected to register a surplus of 5.3 percent of GDP in 2022 – the first surplus since 2014 — while the external balance surplus is expected to reach 17.2 percent of GDP.”

“There is an excellent and timely opportunity to diversify the economy further using a green growth strategy, and playing a leading role in the global transition to low-carbon economies,” said Issam Abousleiman, World Bank Regional Director for the GCC. “The region could use the green growth transition to focus policies on developing green technologies and associated skilled labor that would reverse trends in productivity and enable the region to grow faster.”

The GCC countries’ total GDP, according to the report, is projected to be close to US$ 2 trillion in 2022. “If the GCC continued business as usual, their combined GDP would grow to an expected US$ 6 trillion by 2050. However, if the GCC countries implemented a green growth strategy that would help and accelerate their economic diversification, GDP could have the potential to grow to over US$ 13 trillion by 2050.”

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-Top News UK News

Britain to boost defence spending to 2.5% of GDP

Prime Minister Boris Johnson attends NATO in Madrid. The Prime Minister Boris Johnson attends the Nato meeting in Madrid, Spain. Picture by Andrew Parsons / No 10 Downing Street

PM’s comments came after NATO on Wednesday branded Russia the biggest “direct threat” to Western security and agreed plans to modernise Ukraine’s beleaguered armed forces…reports Asian Lite News

Britain will boost defence spending to 2.5% of its gross domestic product (GDP) by the end of this decade, Prime Minister Boris Johnson said on Thursday, making a new commitment to bolster the military budget after Russia’s invasion of Ukraine.

“We need to invest for the long term in vital capabilities like future combat air, whilst simultaneously adapting to a more dangerous and more competitive world,” Johnson told a news conference at a NATO summit in Madrid dominated by the Ukraine conflict.

“The logical conclusion of the investments on which we propose to embark, these decisions, is that we’ll reach 2.5% of GDP on defence by the end of the decade.”

His comments came after NATO on Wednesday branded Russia the biggest “direct threat” to Western security and agreed plans to modernise Ukraine’s beleaguered armed forces.

Johnson said the NATO summit had been a success and that “countries around the table are also recognising that they must spend more.”

The alliance asks members to keep its defence spending above the 2% threshold, but Johnson argued earlier this week that the 2% was always meant to be “a floor, not a ceiling”. 

Britain’s defence spending this year was projected at 2.3% of GDP due to increased military support for Ukraine, and Johnson’s new commitment on Thursday would represent an increase from that level.

Earlier this week defence minister Ben Wallace said Britain must boost defence investment to tackle threats not only from Russia but from China and other countries. He said investment must increase from 2024 onwards when the current spending package is due for review.

Asked about the prospect that high inflation in Britain could sap public appetite for supporting Ukraine, Johnson said: “The point I would make about the cost of freedom as it were, is that actually it is always worth paying.

“Unless we get the right result in Ukraine, (Russian President Vladimir) Putin will be in a position to commit further acts of aggression against other parts of the former Soviet Union more or less with impunity, that will drive further global uncertainty.”

Johnson’s remarks came as Russian forces abandoned the strategic Black Sea outpost of Snake Island on Thursday, in a victory for Ukraine which the British prime minister said was evidence of Ukraine’s ability to fight back. 

On Wednesday, Britain promised a further 1 billion pounds ($1.2 billion) in military support to Ukraine.

This uplift to funding will herald a new phase in the international community’s support to Ukraine. It will go towards capabilities including sophisticated air defence systems, uncrewed aerial vehicles, innovative new electronic warfare equipment and thousands of pieces of vital kit for Ukrainian soldiers.

It represents the first step in enabling Ukraine to go beyond their valiant defence against the illegal Russian invasion to mounting offensive operations against Russian ground forces in order to restore Ukrainian sovereignty

The UK is leading the way in providing vital military assistance to Ukraine. Today’s announcement brings the total UK military support since the outbreak of war to £2.3 billion – more than any country other than the United States. Support so far includes more than 5,000 NLAW anti-tank missiles made in Northern Ireland, long-range multiple launch rocket systems, artillery systems, including 155mm self propelled guns, and rapid design and production of short to medium range persistent loitering munitions by a UK start-up company.

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-Top News UK News

UK GDP declines by 0.3%

Construction also shrunk 0.4 per cent in April after strong growth in March, when significant repair and maintenance activities were needed following the storms in February…reports Asian Lite News

The UK’s gross domestic product (GDP) declined by 0.3 per cent in April after a 0.1 per cent drop in March, the Office for National Statistics (ONS) has said.

For the first time since January 2021, the output of all the main sectors (services, production and construction) fell in April, Xinhua news agency reported.

Services, the main contributors to April’s fall, declined by 0.3 per cent.

Production dropped by 0.6 per cent, driven by a 1 per cent fall in manufacturing on the month, as businesses struggled with price rises and supply chain shortages, the ONS said.

Construction also shrunk 0.4 per cent in April after strong growth in March, when significant repair and maintenance activities were needed following the storms in February.

“A big drop in the health sector due to the winding down of the test and trace scheme pushed the UK economy into negative territory in April,” Darren Morgan, director of economic statistics at the ONS, explained on Twitter.

“Manufacturing also suffered with some companies telling us they were being affected by rising fuel and energy prices

The ONS noted that the UK’s monthly GDP in April was 0.9 per cent higher than its pre-Covid-19 pandemic level in February 2020.

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Africa News

WINDS OF CHANGE

People in Africa’s Cities Benefit from Better Socio-Economic Outcomes and Standards of Living, According to New Report. Approximately 30% of Africa’s per capita GDP growth over the last 20 years has been due to urbanisation and the agglomeration economies generated

Urbanisation in Africa contributes to better economic outcomes and higher standards of living, with cities notably outperforming national averages across most socioeconomic indicators including the share of skilled jobs, wages, education and access to service and infrastructure, according to a new report.

Produced by the Sahel and West Africa Club (SWAC/OECD) in partnership with the United Nations Economic Commission for Africa (ECA) and the African Development Bank (AfDB), Africa’s Development Dynamics 2022 The Economic Power of Africa’s Cities analyses data from four million individuals and firms in 2 600 cities across 34 African countries. It offers the most extensive assessment of the impact of Africa’s cities on social and economic outcomes.

Speaking at the virtual launch, Dr Ibrahim Assane Mayaki, SWAC Honorary President and CEO of AUDA-NEPAD, said: “Africa’s cities […] have maintained their economic performance despite growing by 500 million people over the last 30 years, providing several hundred million people with better jobs and improved access to services and infrastructure. This in a context of very limited public support and investment is probably one of the most underappreciated achievements of African cities.”

Cities must therefore be placed at the core of national economic policymaking

In her welcome remarks, Edlam Yemeru, acting Director of ECA’s Gender, Poverty and Social Policy Division, said: “Africa’s urbanisation is a game-changer. The shift is not just demographic but is also reshaping economic and social outcomes substantially. Cities must therefore be placed at the core of national economic policymaking.”

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Key findings are:

Urbanisation boosts GDP growth. Approximately 30% of Africa’s per capita GDP growth over the last 20 years has been due to urbanisation and the agglomeration economies generated.

Urbanisation drives economic transformation. Skilled workers account for nearly 36% of total workers in urban areas while in rural areas, they make up just under 15% of the workforce.

Urbanisation improves access to financial services. Approximately 49% of urban households have a bank account compared to only 17% of rural households.

Urbanisation increases education levels. The average urban dweller receives 8.6 years of formal education, while their rural counterpart attends school for only half as many years.

Cities benefit rural areas. Rural areas close to cities perform better than remote rural areas in terms of employment, education, access to finance and infrastructure. For example, the share of rural households that has a bank account is twice as high among rural households that live within 5 kilometres of a city as compared to those that live 30 kilometres from the closest city.

Clusters of cities provide new opportunities. Five out of six major African urban clusters cross national borders, providing new pathways for economic development and regional integration.

Nevertheless, the report notes that economic and political constraints continue to limit the potential of cities to contribute more meaningfully to economic growth and social development, running the risk of leaving many people behind. It further identifies an urgent need for timely data and new locally tailored approaches to meet the existing and emerging challenges of African cities.

Against this backdrop, the report proposes actions that policy makers can take to maximise the benefits of urbanisation and unlock the full economic potential of Africa’s cities:

National governments should anchor cities in national development and economic planning through better co-ordination of national and local development policies, by leveraging cities as drivers of development and investing in infrastructure that connects cities and increases productivity.

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National governments should empower local governments by considering them as equal partners in shaping economic development, allowing city authorities to manage their investment decisions and build their skills.

National governments should boost local investment capacity through improved finances by implementing predictable and stable intragovernmental transfers, increasing local revenues through taxes, tariffs and fees, and facilitating greater access to debt financing.

In his closing remarks, Mr. Solomon Quaynor, AfDB Vice President for the Private Sector, Infrastructure and Industrialization, said: “Urbanisation is one of the most important transformations the African continent will undergo this century.” 

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Business Economy India News

India’s GDP to be boosted with real time payments

The widespread adoption of real-time payments resulted in estimated cost savings of $12.6 billion for Indian businesses and consumers in 2021…reports Asian Lite News

Real-time payments are forecast to boost India’s GDP by $45.9 billion in 2026 as real-time payments transaction volumes are set to exceed 206 billion by that time, a new report showed on Tuesday.

In 2021, India accounted for the largest number of real-time transactions at 48.6 billion, almost threefold that of China (18 billion transactions) and almost seven times greater than the combined real-time payments volume of US, Canada, the UK, France and Germany (7.5 billion).

According to the report by ACI Worldwide, in partnership with GlobalData and the Centre for Economics and Business Research (Cebr), the real-time payments helped India unlock $16.4 billion of additional economic output in 2021, equivalent to 0.56 per cent of formal GDP.

“India’s craving for cash may be plummeting, but there is still a great deal more to do. It is time to accelerate our efforts and expand this impact beyond the top tier metropolitan areas and replicate our success for the benefit of the entire country,” said Ankur Saxena, Head of India and South Asia, ACI Worldwide, a software company providing real-time payment solutions.

The widespread adoption of real-time payments resulted in estimated cost savings of $12.6 billion for Indian businesses and consumers in 2021.

The growing acceptance of UPI-based mobile payment apps and QR code payments among merchants, combined with the increased use of digital payments during the Covid-19 pandemic, helped real-time payments secure 31.3 per cent of total payments transaction volume last year, the report showed.

With consumers increasingly shifting from cash to mobile-based real-time payments, skipping payment cards, the real-time payments’ share of the total payments volume is likely to rise to over 70 per cent in 2026.

This will result in net savings for businesses and consumers rising to $92.4 billion in 2026, helping generate an additional $45.9 billion of economic output, equivalent to 1.12 per cent of the country’s forecasted GDP.

“By allowing for the transfer of money between parties within seconds rather than days, real-time payments improve overall market efficiencies in the economy,” commented Owen Good, Head of Advisory, Centre for Economic and Business Research.

“Developing nations continue to drive the majority of real-time volume gains, confirming the industry trend of the strongest growth coming from economies with minimal existing electronic payments infrastructure, and therefore heavier reliance on cash,” added Sam Murrant, lead analyst, GlobalData.

“India provides the template for mobile wallet integration with underlying real-time payment systems. Mobile will still be the leading form factor in developed markets,” he noted.

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Categories
China Economy

40% of China’s GDP under lockdown

Nearly 400 million people across 45 cities that are under lockdown represent $7.2 trillion of annual gross domestic product for the world’s second-largest economy…reports Asian Lite News

Nearly 400 million people across 45 cities in China are under full or partial lockdown as part of China’s strict zero-Covid policy.

Together, they represent 40 per cent, or $7.2 trillion, of annual gross domestic product for the world’s second-largest economy, according to data from Nomura Holdings, CNN reported.

Analysts are ringing warning bells, but say investors aren’t properly assessing how serious the global economic fallout might be from these prolonged isolation orders.

“Global markets may still underestimate the impact, because much attention remains focused on the Russia-Ukraine conflict and the US Federal Reserve rate hikes,” Lu Ting, Nomura’s chief China economist, and colleagues wrote in a note last week, CNN reported.

Most alarming is the indefinite lockdown in Shanghai, a city of 25 million and one of China’s premiere manufacturing and export hubs.

The quarantines there have led to food shortages, inability to access medical care, and even reported pet killings.


The port of Shanghai, which handled over 20 per cent of Chinese freight traffic in 2021, is essentially at a standstill. Food supplies stuck in shipping containers without access to refrigeration are rotting, CNN reported.

Incoming cargo is now stuck at Shanghai marine terminals for an average of eight days before it’s transported elsewhere, a 75 per cent increase since the recent round of lockdowns began.

Export storage time has fallen, but that’s likely because no new containers are being sent to the docks from the warehouses, according to supply chain visibility platform Project44.

Cargo airlines have cancelled all flights in and out of the city, and more than 90 per cent of trucks supporting import and export deliveries are currently out of action.

National crisis

China on Monday reported 3,297 locally transmitted confirmed COVID-19 cases, the National Health Commission said on Tuesday, while lockdowns in cities are triggering cascading effects with Beijing staring at a national crisis.

Of these new locally transmitted cases, China’s economic hub Shanghai reported 3,084 cases and 17,332 locally-transmitted asymptomatic infections, Xinhua reported.

Seven new deaths from COVID-19 were reported on Monday in Shanghai.

Apart from Shanghai, 18 other provincial-level regions on the mainland saw new local COVID-19 cases, including 88 in the northeastern province of Jilin.

A total of 1,912 COVID-19 patients were discharged from hospitals after recovery on the Chinese mainland on Monday, said the Commission report, Xinhua reported.

Across China, cities are locking down their residents, supply lines are rupturing, and officials are scrambling to secure the movement of basic goods, with its largest-ever recorded outbreak of COVID-19 threatening to spiral into a national crisis of the government’s own making.

At least 44 Chinese cities are under either a full or partial lockdown as authorities persist in trying to curb the spread of the highly transmissible Omicron variant, according to a report from investment bank Nomura and CNN’s report as of Thursday.

In Shanghai, the epicentre of the country’s latest outbreak, scenes once unimaginable for the hyper-modern financial capital have become part of the daily struggle for 25 million people.

There, residents forbidden to leave the confines of their apartments or housing blocks for weeks have been desperate for food and freedom — some seen in social media clips screaming out of their windows in frustration or clashing with hazmat-clad workers. Even after the release of a tentative plan Monday for the partial relaxation of measures, there appears to be no end in sight, reported CNN.

The current situation may mark the most significant challenge for the country — and, arguably, for Chinese leader Xi Jinping against zero Covid policy.

Getting supplies across the country has become a steep challenge, with some expressways closed, and truck drivers ensnared in quarantine or at thousands of highway health checkpoints.

Some cities have discouraged their residents from leaving, like the major southern port of Guangzhou, which requires its 18 million people to show a negative COVID test if they want to get out. Moreover, the zero-covid policy has sparked mounting frustration and anger in Shanghai and threatens more disruption amplifying the risks for the Communist Party. (IANS/ANI)

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-Top News Economy India News

Ukraine crisis: Ind-Ra revises India’s FY23 forecast

“Ind-Ra expects GDP to grow 7.2 per cent YoY in ‘Scenario 1’ and 7 per cent YoY in ‘Scenario 2’ in FY23, compared to its earlier forecast of 7.6 per cent.”…reports Asian Lite News

Ratings agency India Ratings and Research (Ind-Ra) on Wednesday revised India’s FY23 forecast downwards to 7-7.2 per cent.

Accordingly, the ratings agency believes that its ‘FY23 Economic Outlook’ released in January 2022 is unlikely to hold in view of the global geo-political situation arising out of the Russia-Ukraine conflict.

“Since the duration of Russia-Ukraine conflict continues to be uncertain, Ind-Ra has created two scenarios with respect to the FY23 economic outlook basis certain assumptions.”

According to Ind-Ra, in scenario-one, crude oil price is assumed to be elevated for three months, and in scenario-two, the assumption is for six months, both with a half cost pass-through into the domestic economy.

“Ind-Ra expects GDP to grow 7.2 per cent YoY in ‘Scenario 1’ and 7 per cent YoY in ‘Scenario 2’ in FY23, compared to its earlier forecast of 7.6 per cent.”

“However, the size of the Indian economy in FY23 will still be 10.6 per cent and 10.8 per cent lower than the FY23 GDP trend value in ‘Scenario 1 and Scenario 2’, respectively.”

As per the agency, consumption demand as measured by private final consumption expenditure (PFCE) has been subdued in FY22, despite sales of select consumer durables showing some signs of revival during the festive season.

“As the consumer sentiment is likely to witness a further dent due to the Russia-Ukraine conflict leading to rising commodity prices or consumer inflation, Ind-Ra expects PFCE to grow at 8.1 per cent and 8 per cent in ‘Scenario 1 and 2’, respectively, in FY23, as against its earlier projection of 9.4 per cent.”

Besides PFCE, Ind-Ra said that private capex by large corporates, which has been down and out over the past several years, had shown some promise lately in view of the roll-out of the ‘Production-linked Incentive Scheme’ and increased manufacturing sector capacity utilisation driven by higher exports.

“However, Ind-Ra expects the surge in commodity prices and disruptions in global supply chain caused by the Russia-Ukraine conflict to take a toll on their sentiments and there is a likelihood that this capex may get deferred till more clarity emerges with respect to the conflict.”

“Government capex, however, is unlikely to be dented. By scaling up the capex to GDP ratio for FY22 to 2.6 per cent as per revised estimate from the budgeted 2.5 and budgeting the capex at 2.9 per cent of GDP for FY23, the government has been showing its resolve to do the heavy lifting.”

Furthermore, the agency cited that although the Centre acknowledges the adverse impact of the Russia-Ukraine conflict on the ongoing Indian economic recovery, it is unlikely to scale down its fiscal support already announced in the FY23 budget.

“Even the RBI has so far resisted the temptation to tighten its monetary policy stance, despite retail inflation being close to its upper tolerance level and/or occasionally breaching it.”

“Although there is a case for a 50bp increase in the policy rates in FY23, the RBI may still opt for accommodation, because it believes initiating a premature demand compression via a monetary policy action would be counterproductive, particularly when the recovery is fragile and there is an output gap in the economy.”

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Business India News

India’s FY22 growth estimated at 8.9%

As per the estimate, real GVA at basic prices is estimated at Rs 136.25 lakh crore in 2021-22, as against Rs 125.85 lakh crore in 2020-21, showing a growth of 8.3 per cent…reports Asian Lite News

India’s economy is estimated to clock a real GDP growth of 8.9 per cent in FY22 down from the earlier estimate of 9.2 per cent, official data showed on Monday.

In 2020-21, India’s economy had contracted by 6.6 per cent.

On Monday, the ‘Second Advance Estimates of National Income for financial year 2021-22’, estimated that ‘Real GDP’ or ‘GDP at Constant Prices’ (2011-12) in the year 2021-22 will rise to Rs 147.72 lakh crore from the ‘First Revised Estimate of GDP’ for 2020-21 at Rs 135.58 lakh crore.

“The growth in GDP during 2021-22 is estimated at 8.9 per cent as compared to a contraction of 6.6 per cent in 2020-21,” the National Statistical Office (NSO) said.

As per the estimate, real GVA at basic prices is estimated at Rs 136.25 lakh crore in 2021-22, as against Rs 125.85 lakh crore in 2020-21, showing a growth of 8.3 per cent.

In terms of sectors, the estimates showed growth from agriculture, forestry and fishing, mining and quarrying, manufacturing and construction at 3.3 per cent, 12.6 per cent, 10.5 per cent and 10 percent, respectively.

The GVA at basic prices for 2021-22 from the electricity, gas, water supply and other utility services sector is expected to grow by 7.8 per cent.

In addition, the GVA from trade, hotels, transport, communication and services related to broadcasting, financial, real estate and professional services, and public administration, defence and other services grew at 11.6 per cent, 4.3 per cent, and 12.5 per cent, respectively.

“The growth estimates for the full fiscal are broadly in line with expectations. However, to achieve 8.9 per cent growth, the Q4 GDP has to grow by 4.8 per cent. This looks challenging given the fact that the third wave of the pandemic had caused considerable restrictions,” said M. Govinda Rao, Chief Economic Adviser at Brickwork Ratings.

“In addition, the ongoing geopolitical tensions, persistent supply bottlenecks, coal, power, and semiconductor shortages too have been pronounced. The effect of semiconductor shortages is already evident in the weak 0.2 per cent growth in the manufacturing sector in Q3.”

He also said that the third wave largely impacted the economic activities in the fourth quarter.

“We expect the full fiscal growth may undergo revisions. Finally, the higher crude oil prices are also likely to adversely impact both growth and inflation.

Madhavi Arora, Lead Economist, Emkay Global said: “The sub 9 per cent GDP growth in FY22 revised estimates partly also captures past revisions. The economic recovery might see a minor bump down in 4QFY22 led by mild omicron wave, while the current geopolitical escalation may lead to potential global energy trade and price disruptions and weigh on growth.

“We assume the energy supply shock may resolve in coming months and likely will not leave a lasting mark on the global and domestic expansion. However, it would clearly have a near term negative impact.”

Going ahead, Arora said that fiscal and monetary support will continue to nurture growth, especially as recovery in domestic economic activity is yet to be broad-based.

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-Top News Business India News

Finance Minister opts for growth in Union Budget

The outlay for capital expenditure in the Union Budget is once again being stepped up sharply by 35.4 per cent from Rs 5.54 lakh crore in the current year to Rs 7.50 lakh crore in 2022-23, reports Asian Lite News

Finance Minister Nirmala Sitharaman on Tuesday announced that Union Budget 2022-23 seeks to lay the foundation and give a blueprint to steer the economy over the ‘Amrit Kaal’ of the next 25 years – from India at 75 to India at 100.

The outlay for capital expenditure in the Union Budget is once again being stepped up sharply by 35.4 per cent from Rs 5.54 lakh crore in the current year to Rs 7.50 lakh crore in 2022-23. This has increased to more than 2.2 times the expenditure of 2019-20. This outlay in 2022-23 will be 2.9 per cent of GDP.

With this investment taken together with the provision made for creation of capital assets through Grants-in-Aid to States, the ‘Effective Capital Expenditure’ of the Central Government is estimated at Rs 10.68 lakh crore in 2022-23, which will be about 4.1 per cent of the GDP.

As against a total expenditure of Rs 34.83 lakh crore projected in the Budget Estimates 2021-22, the Revised Estimate is Rs 37.70 lakh crore. The Revised Estimate of capital expenditure is Rs 6.03 lakh crore. This includes an amount of Rs 51,971 crore towards settlement of outstanding guaranteed liabilities of Air India and its other sundry commitments.

Coming to the Budget Estimates, the total expenditure in 2022-23 is estimated at Rs 39.45 lakh crore, while the total receipts other than borrowings are estimated at Rs 22.84 lakh crore.

The revised Fiscal Deficit in the current year is estimated at 6.9 per cent of the GDP as against 6.8 per cent projected in the Budget Estimates. The Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of the GDP, which is consistent with the broad path of fiscal consolidation announced last year to reach a fiscal deficit level below 4.5 per cent by 2025-26.

“While setting the fiscal deficit level in 2022-23, I am conscious of the need to nurture growth, through public investment, to become stronger and sustainable”, the Finance Minister added.

Sitharaman said the government aims to attain the vision by complementing the macro-economic level growth focus with a micro-economic level all-inclusive welfare focus, promoting digital economy & fintech, technology enabled development, energy transition, and climate action, and relying on virtuous cycle starting from private investment with public capital investment helping to crowd-in private investment.

Sitharaman said this Budget continues to provide impetus for growth. It lays a parallel track of a blueprint for the Amrit Kaal, which is futuristic and inclusive. This will directly benefit our youth, women, farmers, the Scheduled Castes and the Scheduled Tribes. And big public investment for modern infrastructure, readying for India at 100. This shall be guided by PM Gati Shakti and be benefited by the synergy of multi-modal approach, she added.

PM Gati Shakti Master Plan for Expressways will be formulated in 2022-23 to facilitate faster movement of people and goods. The National Highways network will be expanded by 25,000 km in 2022-23. Rs 20,000 crore will be mobilized through innovative ways of financing to complement the public resources.

One hundred PM Gati Shakti Cargo Terminals for multimodal logistics facilities will be developed during the next three years.

Innovative ways of financing and faster implementation will be encouraged for building metro systems of appropriate type at scale. Multimodal connectivity between mass urban transport and railway stations will be facilitated on priority.

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