India’s US$530 billion budget and China-beating 9.2 per cent growth target camouflage struggles with inflation, unemployment

Eye-catching plans for repairing a pandemic-scarred economy have cheered the stock market, but analysts say those who need help the most will be left wanting

While PM Modi goes big on infrastructure, he has cut outlays to the rural poor even as elections loom. Meanwhile, rising oil prices make his target look ‘optimistic’ at best

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A child near the Indian Parliament, in New Delhi, takes shelter from the wind as protesters arrive in the capital for protests against rising inflation and unemployment. Photo: AP

Published: 4:15pm, 10 Feb 2022

Arjun Kumar, 42, was making good money as a driver for a New Delhi couple who had employed him for years. But when Covid-19 struck two years ago, they let him go and, since then, he hasn’t found another steady job.

“Everybody’s working from home, they don’t need someone regularly,” Kumar said. He used to send money home to his wife, three children and parents in his home village in the eastern state of Bihar. Now, he can scarcely support himself with the few driving jobs he gets.

Last week, India announced in its new budget a go-for-growth spending spree to repair its pandemic-scarred economy. The government’s 40 trillion rupee (US$530 billion) budget is targeting a world-beating 9.2 per cent economic expansion for this fiscal year ending in March and 8 to 8.5 per cent growth for next year, fired by huge infrastructure outlays.

The budget has cheered the stock market, but for the legions of unemployed or semi-employed workers, the government’s big plans won’t make any kind of immediate difference.

[It] camouflages the real ‘Third World’ issues that still plague us, such as unemployment

Sanjay Jha

While Finance Minister Nirmala Sitharaman is betting infrastructure spending can have a multiplier effect on job creation, consumption and drive overall prosperity, the reality is it will take time for benefits to trickle down to those who need it most, economists say.

The government’s budget has held back on big-bang policies to improve the lot of India’s so-called “common man” and put money in the pockets of the poorest. This is all the more unusual given looming elections in five states – seen as an important popularity test of the ruling Bharatiya Janata Party (BJP) midway through its second term.