Indian government to maintain capital spending on sustained revenue: ministry

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(Bloomberg) – India’s government capital spending is expected to hold steady, supported by « strong revenue growth » over the remainder of the fiscal year, the finance ministry said in a monthly report.

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“The strong recovery in private consumption,” supported by improving consumer confidence and rising employment, will support growth in the coming months, the ministry said in its August economic review released on Saturday. .

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Government capital expenditure for April-August reached 2.3 trillion rupees ($28.8 billion), up 35 percent from the year-ago period, according to the report. This level of spending has helped “attract” private investment, according to the government.

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While tax revenues are expected to continue to grow, « vigorous pursuit of asset monetization at all levels of government will help reduce debt stocks and hence debt servicing costs, » the ministry said.

Inflationary pressures appear to be easing, helped by the preventive measures taken by the government, a prudent monetary policy and the easing of commodity prices and supply problems, the ministry said.

Still, inflation risks remain following the decline in plantings during the key Kharif season. In addition, global geopolitical tensions over energy security over the winter months could test « India’s shrewd management of its energy needs so far », the report said.