Sitharaman told a global news agency on Thursday that India’s economy will return to growth in 2021-22 and higher spending in the Budget due in February next will lay the foundations for even stronger growth in the next 4-5 years.
According to a media report, India’s economy is expected to contract nearly 10% in the financial year 2020-21 with the world’s second-highest cases of Covid19 despite lockdown.
Sitharaman told Reuters Global Investment Outlook Summit, 2021that a recovery is taking hold now.
“I would think 2021-22 will be very big, good traction year for achieving a really good rate of growth that itself is going to be a launching pad for 4-5 years of growing at a good speed, provided we do enough on the budget and spend on infrastructure,” the report quoted Sitharaman as saying.
Countries like the United States, Japan and the United Kingdom have spent billions of dollars in relief measures.
But because of limited resources, the Indian government has been more measured in its approach and it plans to curb its budget deficit from ballooning.
She suggested that the government may ease up on spending in the coming months in order to boost the growth rate of the country.
“I have to be conscious that if I don’t spend now, then the stimulus is meaningless, if I don’t spend now the revival is going to get deferred and we can’t afford that,” the report quoted the Union Finance Minister as saying.