Eco Survey 2022: Fiscal situation comfortable, says Niti Aayog VC; adds infra spending to spur employment

The country's financial situation is now very comfortable with the government revenue rising 67 percent and that the Centre is committed to ramping up capital expenditure (capex), Kumar said, adding that capex grew by about 15 percent in the current fiscal and that he expects a similar increase going forward.

He said, "I think the government is committed to ramping up the capex and the fiscal situation is very permissible of that, because of the 67 percent rise in revenues between April to December. The capex already grew by 15 percent in 21-22 that is the estimate and you can see a similar increase in that."

He said there  are 14 sectors with a total Product-Linked Incentive (PLI) allocation of Rs 1.97 lakh crore right now, and  expects more than 60 lakh jobs to be created. He said increased spending on infrastructure and capex will spur employment generation. Apart from allocation under PLI, the government has set aside Rs 76,000 for the fabrication industry. Manufacturing activities will be a significant uptick driven by PLI benefits, Kumar said.

Further, Kumar said non-performing assets (NPAs) are on the way down. He said the most virulent phase of the COVID-19 pandemic is behind us, and that the services sector--the hardest hit by the pandemic--is on the recovery path and will see a sharp rise in the 2022-23 financial year. Kumar also said he expects exports and consumption to drive growth, now that the supply constraints are easing and that we are entering an era of very strong private sector growth.

Expenditure is not more than revenue, creating a fiscal space, Kumar said, adding that a fiscal space of 1-1.5% of the GDP will be significant enough to drive demand.

Kumar said, "Given the very smart rise in our revenues, and given that the expenditures have not risen by as much in the last year."

He added, "I think you will see that all the fiscal space, again I repeat myself will be significant. I would even put a number to it, I think you will get an extra fiscal space of, let us say, about 1-1.50 percent of GDP, and that I think, is a significant number in the government's coffers to try and ramp up demand, especially investment demand."

Given the very smart rise in our revenues, and given that the expenditures have not risen by as much in the last year, I think, the government has significant fiscal space at this point of time and this can be used both for some cleaning up of the government balance sheets and some debts etc.

He said, "I think, the government has significant fiscal space at this point of time and this can be used both for some cleaning up of the government balance sheets and some debts etc."

On the heels of Air India privatisation, the NITI Aayog vice-chairman said he expects further privatisations this year, as there is a long list of suitable candidates. He said the sale of Neelachal Ispatl Nigam to Tata Long Steel Products was a significant divestment, but added that the government may not be able to fully meet its target for divestment, though the process is underway.