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The Centre had upped public spending in the expectation that it would lure the private sector into investing heartily, but this hasn’t quite worked out. State expenditure has its limits. Thankfully, the Centre has been cautious.
PremiumIndia has reason to be pleased with its latest core sector output and fiscal deficit data released on Monday. While the output of eight key industries grew a healthy 7.9% from a year earlier in September, the government’s fiscal deficit for the first half of 2022-23 stood at 37.3% of the whole year’s estimate. That our core sector growth was on top of last September’s 5.4% expansion is heartening, as it shows output expanded on a moderately large statistical base. To be sure, this indicator has often shown high volatility in the short term, but it has been on an incline for many months, with output expanding 9.6% in the first half of this fiscal year. While India’s economic recovery may have broadened, there is plenty that’s still not alright with our economy. The spring back from the covid crisis has been uneven, with only a few sectors pulling the economy ahead. Private investment hasn’t picked up as robustly as hoped, despite policy efforts to stimulate it. The Centre had upped public spending in the expectation that it would lure the private sector into investing heartily, but this hasn’t quite worked out. State expenditure has its limits. Thankfully, the Centre has been cautious.
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