Higher allocation of capital expenditure can have a multiplier effect on economy according to the Federation of Indian Chambers of Commerce & Industry (FICCI). Speaking on the Union Budget unveiled by Hon’ble Finance Minister of India, Nirmala Sitharaman in the Parliament recently, Sanjiv Mehta, President, FICCI said that the budget was forward looking and growth oriented and drive long-term development. 

Mehta believes that the current budget builds on last year’s budget and scores high on several parameters such as capex led growth, energizing stressed sectors, simplification of tax policies, etc. In the run up to the budget, FICCI had articulated the clear need to prime up the economy through government expenditure as both private consumption and investments remained tepid. FICCI appreciates the government for not being hemmed in by the neoclassical trap of fiscal conservatism and providing a very clear glide path for fiscal consolidation that is in sync with the economic realities. 

The extension of the Emergency Credit Line Guarantee Scheme for one more year and allocation of additional INR 50,000 crore for hospitality sector would be instrumental in providing relief to the MSME and hospitality industries. Expressing satisfaction, Mehta said that he hoped the Finance Minister will keep some flexibility in the budget allocations and if need be, enhance the same.