Topic: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
5. Increased capital expenditure is vital for India’s economic development. Critically examine. (150 words)
Difficulty level: Tough
Reference: moneycontrol.com
Why the question:
The NDA winning the 2024 elections with a slimmer majority raises a pertinent question whether government outlay on infrastructure will continue with the same fervour as seen in the past.
Key Demand of the question:
To write about the impact of increased capital expenditure on the economy of India.
Analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary.
Structure of the answer:
Introduction:
Begin by defining a capital expenditure.
Body:
First, write about the positive impact the increased capital expenditure will have on the economy of India – speedy and sustainable revival, crowding in private investment, boost to investment activity and support economic growth in the next year etc.
Next, write the downside of increased capital expenditure – higher inflation, higher fiscal deficit etc.
Conclusion:
Conclude by writing a way forward to have a prudent increase in capital expenditure whilst adhering to fiscal limits of borrowing.
