Budget opted for lasting benefits, not temporary relief: TV Somanathan

I still hold the view that except for the poor, what is restraining consumption is activity restriction, which is not financial in its origin, says finance secretary

The FY23 Budget’s nominal GDP assumptions factor in an expectation that the deflator will show a ‘reversal to the mean’ in the coming year, finance secretary TV Somanathan told Arup Roychoudhury and Asit Ranjan Mishra. In a freewheeling interaction, Somanathan said that because of interest rate increases, the government was not expecting NSSF contributions in FY23 to be as much as FY22. He added that consumption will bounce back once the pandemic-related local restrictions are behind us. Edited excerpts:

What has been the deflator assumption behind your nominal GDP growth target for FY23?

The ministry’s economists have estimated 8-8.5 per cent growth.