Govt’s focus on infra spending to have a multiplier effect on the economy: Jayant Sinha

Quashing allegations from the opposition parties, Jayant Sinha, Member of Parliament from the Bharatiya Janata Party (BJP) and former finance minister today said, the Union Budget 2023-24 is well intended and would boost the Indian economy. Talking at the Business Today Budget Round Table 2023, Sinha emphasised on the government’s intent towards providing the economy with ingredients for a sustainable growth.

According to Sinha, the focus on infrastructure building that has been the core of the new Budget, which will have a multiplier effect on the economy.

“Capital expenditure is really a sort of secret sauce for growth. Because what happens is that when you're investing in infrastructure, like in railways, in airports and highways in other aspects like metro lines, all of these not only results in growth right away but also in the long term,” he said.

“Because what happens is, you obviously employ people when you're building a railway line, you buy cement to buy steel, you get a construction company to do that. So you definitely stimulate growth even as you're painting the railway, the line on your building. And you're putting an asset in the ground, that's going to make you more productive and more efficient for the next 30 to 50 years. That's where the huge multiplier effect of capital expenditure comes in,” Sinha explained.

According to him, on an average investments in infrastructure projects yield benefits to the economy in the tune of 2.5 times. “Certain aspects of infrastructure are even better. So for example, having been associated with the aviation sector, even a founder if you invest in airports, airports have an economic multiplier of six,” he said.

Talking about the capital expenditure by the private enterprises, which has been lower than expected in recent times in India, Sinha said the government has created a conducive environment for private investments. Capacity utilisation of private manufacturers is at 70-75 per cent levels “and this is the point at which people start to invest”.

By keeping inflation and interest rates under control, the government led by Prime Minister Narendra Modi has provided the right environment. “He has made it very attractive for the private sector to invest in infrastructure and in their production facilities. And that's why this growth is sustained and the macro-economic.

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