New Delhi: The government of India is working on various fronts to spur the economy starting with improving people’s income or in other words pushing more money into their hands particularly those living in the rural parts of the country in order to boost consumption, the Finance Minister Nirmala Sitharaman told The Sunday Express in an interview.
This will trigger a virtuous cycle of increased demand and investment, she said, adding that as the “consumption increases, demand increases, investment increases, as a natural course.”
Nirmala Sitharaman highlighted the direct benefit transfer (DBT) programme “to those who need to get it and get it instantly, being enabled by technology, was one very big way,” she said through which the government is enabling people’s access to money.
According to the DBT Mission, Rs 3.29 lakh crore were transferred under DBT in 2018-19 under 440 schemes to 129 crore DBT beneficiaries. In FY20 so far, Rs 62.7 k crore has been transferred in more than 48 crore transactions under 439 schemes to 59 crore beneficiaries with estimated gains worth Rs 1.41 lakh crore.
India’s consumer spending will grow from $1.5 trillion currently to nearly $6 trillion by 2030 on the back of income growth from a “bottom of the pyramid economy” to a middle class-led one, World Economic Forum had said in a report in January this year. The country is set to become the third-largest consumer market after the US and China.
However, there would be societal challenges to be addressed including skill development and employment of the future workforce, rural India’s socio-economic inclusion and need for a healthy and sustainable future for its people.
The government was boosting consumption via public spending on infrastructure to help core industries with instant benefits. The minister said that the demand for industrial material including cement, steel etc., is increased directly or perhaps even directly when the roads get laid, bridges are built, airports and seaports get strengthened and inland waterways are created.
India will see in situ promotion of labour as the government spends more on infrastructure that will have “the ripple effect, I expect, on labour everywhere, rather than concentrated in one place…,” Nirmala Sitharaman said stressing on its “immediate impact on consumption.”