Indicating a continued push for public spending, finance secretary T V Somanathan has stated that the current level of capital expenditure in India is highly sustainable. He expressed confidence that the government would achieve its spending and fiscal deficit targets for the fiscal year. While Somanathan did not provide guidance on whether the government intends to increase the level of capex, he expects government agencies to fully utilize the allocated funds. High growth in capital expenditure has been the centerpiece of the Modi government’s second term, focusing on investment in infrastructure projects to stimulate demand and boost capacity in steel and cement plants. In addition, the terms of reference for the 16th Finance Commission will be simplified to allow for greater consultation with states and other stakeholders. This decision is based on feedback from several states. Unlike previous years, the Census period will not be the basis for population analysis, as the Constitutionally mandated body will determine the criteria for recommendations. Somanathan also highlighted the success of the Vivad Se Vishwas scheme, which has settled around 44,000 claims for MSMEs, enabling them to once again participate in government contracts. Approximately 4,000 cases are still pending for resolution.
