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Finance Minister Nirmala Sitharaman, addressing the media with her core team in a post-Budget press conference on Thursday, spoke about the Budget’s commitment to the fiscal consolidation path, capital expenditure push, and future guiding principles for government policy. Edited excerpts:
On theme of the Budget
Sitharaman: GDP — governance, development and performance are the three heads that form a backdrop for Budget presentation. On ‘G’, that is governance, we have managed the economy better with correct intentions and policies; it is ‘governance with care, conviction and confidence’. ‘D’ is for people living better, earning better and having high aspirations for the future. The ‘P’ is for three consecutive years of 7 per cent growth, (the tag of) the fastest-growing country in G20, price stability and inflation management, cleaning up of the banking system, GST (goods and services tax), and IBC (insolvency and bankruptcy code).
On fiscal deficit
Sitharaman: (We are) bringing down fiscal deficit in line with the announced consolidation path — in spite of very challenging times — with transparency and prudence. Budget process has become absolutely transparent. Budget deficit of 5.8 per cent is much lower than the 5.9 per cent in Budget Estimates (BE). Fiscal deficit of 5.1 per cent for FY25 clearly indicates that we are on track to meet the glide path which was set in 2021-22, and we are well on track to meet the target of 4.5 per cent (or below) by FY26.
On Dishanirdeshak baatein
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Sitharaman: The first of the five dishanirdeshak baatein (guiding principles) is social justice as an effective and necessary governance model. The second are four major ‘caste groups’ — the poor, women, youth and farmers. The third is our focus on infrastructure: We are continuing the trend of the last four years where capex has been the route for revival — earlier from Covid and now for sustained growth towards the Viksit Bharat goal. The fourth is using technology as a huge opportunity. DPI (Digital Public Infrastructure) is bringing value addition to the economy and facilitating every sector. The fifth is the high-powered committee for extensive consultation on challenges arising from population growth and demography.
On capital expenditure
Sitharaman: Capex growth of 11 per cent appears low on a high base. When the government wants to spend through capex, it can be to trigger the economy. We came in fully when the private sector did not. We are now seeing signs of the private sector coming in.
On rating agencies
Sitharaman: We are not only aligning with the fiscal consolidation road map but bettering it, is a straight forward message which the rating agencies should take on board.
On withdrawal of outstanding tax demand
Sanjay Malhotra (revenue secretary): Large amounts in tax demand are pending. The total amount is very high, at around Rs 35 trillion. Of these, 21 million demands are valued at less than Rs 25,000. Of those, 5.8 million entries for FY09-10 and another 5.3 million for remaining five years are being remitted. The total amount would be less than Rs 3,500 crore. Mostly these demands do not exist and they will not yield any revenue. It is not a waiver. The finance minister has not called it a waiver but a correction of entries.
On research and innovation fund
T V Somanathan (finance secretary): The Rs 1 trillion provision is for a period of time — as the need emerges — to be given as a 50-year interest-free loan to a financial institution which will be identified. This institution will finance or refinance projects at long tenors and concessional rates of interest.
Ajay Seth (Department of Economic Affairs secretary): This is for innovation and research in sunrise sectors. Clear identification of the sunrise sectors would be through a stakeholder process.
On Housing Scheme
Somanathan: The contours are being worked out. Nothing has been finalised yet. Multiple options are being considered to achieve the purpose that has been set out.
On high-level committee on demographic challenges
Seth: When we talk of demography, it is an opportunity and a challenge. This committee will have a mandate of considering those challenges and opportunities and come out with a specific set of recommendations.
On the Middle East Europe Corridor
Sitharaman: We are taking it forward. Yes, there is significant disturbance in the Red Sea area, but this is a project that has long-term implications for the entire region up to Europe. We will take it forward in all its contours.
On the National Pension System
Sitharaman: Once we are ready with the report, we will let you know, there was no time given. We will give it at the earliest.
On fertiliser subsidy
Somanathan: It is estimated based on recent trends in ammonia and fertiliser prices which have trended downwards in the last six months. It is our current estimate based on the best information we have right now.
On lowering market borrowings
Somanathan: The confidence (for lowering) comes from the numbers that are presented. The revenue and expenditure numbers are realistic, then deficit numbers are realistic. Therefore, deficit numbers are achievable. There is a declining trend in external debt and small savings. On gross borrowing next year, some of the repayment of loan would not happen from the consolidated fund; they are repayment for GST back-to-back loans. There is a slight recalibration. The decline in net borrowing is gentle but decline in gross borrowing is steeper.
On MGNREGA
Sitharaman: The Comptroller and Auditor General (CAG) has commented on the way the Mahatma Gandhi National Rural Employment Guarantee Scheme is operating in some states where claims are reaching a stage where they need to be verified. Questions critical to the very spirit of the programme are being raised. To that extent, the CAG report highlights where course correction has to happen.
