Finance Minister Nirmala Sitharaman on Monday, in an exclusive interview to Network 18 editor-in-chief Rahul Joshi spoke about the government’s “fine balance” carried out through the Union Budget 2021.
When asked about the Sensex zooming by over 2,000 points, Sitharaman said that she had not followed the developments since the Budget release. “I hope the intention of two-three major points that came out in the budget are well understood and received,” she said.
Talking about facilitating a spending push, the FM said – “One thing is clear, if I had more resources to give, I would have given it to the people. The question of giving money so that an immediate demand-push happens also triggers another question: Will they spend or will they keep it aside for a rainy day? Also, spending will result in immediate demand increases – no doubt, possibly if they spend – but will it be a meaningful trigger for a virtuous cycle to be triggered? Unless that spending happens in sectors where the (force) multiplier will work, there is no point in spending in areas where the multipliers are weak.”
She said the government had not want to fund the Budget through taxation, and that an approach towards holistic health had been taken. “I did not want to fund the whole operation through taxation. With tax buoyancy kept conservative; and with disinvestment, an improved GST collection, we will hopefully be looking at better times.”
When asked if for a “fiscally prudent government”, the budget was a “U-turn”, Sitharaman said – “It is one thing to be conservative or prudent at normal times. If I don’t spend now we will be postponing growth. Given the situation, stimulus was absolutely necessary. Quality expenditure is what we looking for, and it will give us the required multiplier. Once a virtuous cycle begins, things will fall into place.”
She said the government had not overstated its previous estimations, and that the pandemic and its impact would have to be kept in mind.
She said there was a sentiment around Public Sector Banks that they could not “touched”, adding that one or two banks could not meet the demands of a growing aspirational India.
“For a growing aspirational India, one financial institution cannot meet up with all demands. We will have to have a provision for private DFIS to come in,” she said.
Asked about the “damned if you do, damned if you don’t mindset” of critics, and how the government was able to marry the divergent aspirations of various classes, Sitharaman gave credit to Prime Minister’s consciousness towards the poorer sections of India.
“The Prime Minister has carried out a fine balancing act, he is a clear-headed leader. He never misses out on what has to be done for poorer sections. After the announcement of the lockdown, the Gareeb Kalyan package was announced within 48 hours,” she said.
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