NEW DELHI, India – India’s government will step up spending to 39.45 trillion rupees in the coming fiscal year to build public infrastructure and drive economic growth, it said on Tuesday, February 1, but it involves a wider fiscal deficit than targeted and record borrowing.has been on the mend after the government lifted mobility measures in June to curb the spread of the coronavirus, after contracting 6.6% in the previous fiscal year.
“The economy has shown strong resilience to come out of the effects of the pandemic with high growth. However, we need to sustain that level to make up for the setback of 2020-21,” she said. For the next fiscal year, Prime Minister Narendra Modi’s government is targeting a deficit of 6.4% of GDP, hoping to build on higher tax revenues and privatization of state firms including a share sale of giant insurer Life Insurance Corporation.
The benchmark 10-year bond yield rose 15 basis points, posting its biggest single-day rise since May 11, 2020. It had earlier hit levels last seen in early July 2019. The rupee closed 0.2% weaker at 74.79 to the dollar.