The Centre may seek parliamentary approval to spend about $7.5 billion more on roads, railways and other public programmes over the next five months, two government sources said, as Prime Minister Narendra Modi looks to spur growth and create jobs.
The new spending, details of which are still being worked out, would come at a time when private investment has plunged, leading to a slowdown.
It would also coincide with the run-up to a crucial state election early next year in Uttar Pradesh, Indian's most populous state that is home to more than 200 million people.
At $7.5 billion, the additional spending would represent about 2.5 per cent of the total budgeted so far for the current fiscal year.
The Uttar Pradesh poll is shaping up to be one of the most important tests for Mr.Modi's ruling Bharatiya Janata Party, with ramifications both for the smooth functioning of government and his chances of winning a second term in 2019 national elections.While some of his government’s initiatives, such as bank accounts have started reaching people in the country's vast rural hinterland, the administration has struggled to create enough jobs.
