Fiscal support measures to stay: FM Sitharaman | Economic Times

New Delhi: Finance Minister Nirmala Sitharaman said the government is not in a hurry to narrow the fiscal deficit and will be careful while charting India’s fiscal path so that growth is not hit. Responding to the debate on the February 1 budget in the Rajya Sabha on Friday, she said that the government was looking at solutions that can keep India on a growth trajectory that maintains its status as one of the fastest-growing economies in the world.“The budget has come out boldly on many things, clearly stated openly what the government’s position is and therefore admittedly, the fiscal deficit number is what it is,” Sitharaman said. The budget aims to make India self-reliant and provides a strong stimulus for medium to long-term sustainable high growth.“We have not even hurried to say, OK tomorrow, next year, we will quickly get the deficit number to be something which all of us would like to see - not at all,” she said, underscoring the emphasis on growth. “We are going to be careful about how we are going to come down that path without affecting or creating any hurdle in this growth path of this country.” The government has projected a fiscal deficit of 6.8% of GDP for FY22 in the budget against 9.5% for FY21. It has also set a glide path to reduce the deficit to 4.5% by FY26.Sitharaman said the budget featured a stimulus to bolster revival and systemic reforms that will strengthen growth, ease of doing business and sustain India’s leadership in entrepreneurial skills. “The attempt made in this budget is to provide a strong stimulus which can bring in that kind of a multiplier effect,” she said. “Therefore, the route in which we have gone in order to achieve the stimulus is to fund infrastructure, both in several areas like railroads, bridges, ports and waterways, agricultural infrastructure and health infrastructure.”80890569She noted that the government’s stand on privatising companies through the new public sector enterprises (PSE) policy was consistent with the Bharatiya Janata Party’s views over the years. The policy details the four strategic sectors in which there will be a minimum presence of state-owned companies. They will move out of the rest, thus encouraging the private sector. Reiterating Prime Minister Narendra Modi’s views, Sitharaman said that wealth creators and honest taxpayers will have to be respected rather than constricted through regulations and licences, the norm before liberalisation.INCREASED ALLOCATIONSDefence, health, rural employment and support to micro, small and medium enterprises (MSMEs) are among key areas where budgetary allocations have been increased, Sitharaman said, rebutting accusations by the opposition that these have been reduced. The allocations for pensions, capital expenditure and defence have gone up to Rs 1.15 lakh crore, Rs 1.35 lakh crore and Rs 2.12 lakh crore, respectively, Sitharaman said.She added that under PM-KISAN, over Rs 1.15 lakh crore had been given directly to over 107.5 million farmers since the inception of the scheme. The like-to-like comparison for the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) had also gone up from Rs 61,500 crore in FY21 to Rs 73,000 crore in FY22. “I want on MNREGA, less emotional, but more factual debate,” she said. Sitharaman said false narratives were being created by the opposition that the government was working for crony capitalists even when several stimulus measures had been undertaken for the poor and farmers, such as housing, rural electrification, e-NAM (National Agriculture Market), crop insurance and others.“It has now become a habit for some in the opposition to constantly allege, in spite of what we are doing,” she said. Among many numbers, she cited 16.7 million houses were completed under the PM Awas Yojana, over 26.7 million households electrified under the PM Saubhagya Yojana since October 2017, and cash was provided directly to 400 million people. “Is that for capitalists?” she said.BUDGET TRANSPARENCY“Everything has been brought under the budgetary accounting mechanism,” Sitharaman said. Without naming him, she hit out at former finance minister P Chidamabaram, who had said major budget numbers were suspect, listing three specific instances from United Progressive Alliance (UPA) government budgets.In one case, capital expenditure growth was inflated by 62% in FY08 when the actual growth was only 9%. In the second case, special bonds of Rs 1.7 lakh crore were issued to oil marketing companies in lieu of cash subsidy payouts. In the third instance, she said, under-provisioning was done as oil marketing companies were being asked to foot the subsidy bill. “The PM does not depend on fudging,” she said.The budget reflected self-reliance and transparency as the government had included the food subsidy and cleared loans of Food Corporation of India due to the National Savings Scheme Fund, thus improving its balance sheet, she said. “It is so important for minimum support price (MSP) based procurements… it's important for our food security,” she said, adding that loans of FCI will be reduced to Rs 1.19 lakh crore from Rs 3.39 lakh crore by the end of FY21 and will fall further to Rs 0.58 lakh crore by the end of FY22.