India aims to increase infrastructure expenditure in its annual budget next week in order to put the economy on a more solid basis, but fiscal limits mean any concessions for pandemic-affected households are unlikely, officials said.
Following a contraction of 7.3 percent in the previous fiscal year, Asia's third-largest economy is expected to expand 9.2 percent in the fiscal year that ends in March.
Despite this, private spending, which accounts for about 55% of GDP, remains below pre-pandemic levels due to rising family debt, and retail prices have risen by nearly a tenth since the COVID-19 outbreak in early 2020.
The budget is to out on February 1st, only days before elections in five states, which may prompt Finance Minister Nirmala Sitharaman to promise increased rural expenditure and food and fertiliser subsidies.
However, these are expected to be dwarfed by spending to improve transportation and healthcare networks, which analysts predict will increase by between 12% and 25% in the coming fiscal year.