Budget debate: We care for poor and respect wealth creators, says FM

Finance Minister Nirmala Sitharaman on Friday tore into the Opposition for creating a “false narrative” of the Budget being pro-rich. The government’s priority and the ruling Bharatiya Janata Party’s ideology are to take care of the people at the bottom of the pyramid and, at the same time, respect wealth creators and taxpayers, she said while replying to the general debate on the Budget 2021-22 in the Rajya Sabha.

Listing a series of measures the government has taken for the poor over the past few years, Sitharaman said she believed entrepreneurs in India should also be respected rather than constrict them through all kinds of regulations and licensing requirements.

Though the minister didn’t name the Congress, the hint was clear as Congress leader Rahul Gandhi had taken a dig at the government policy of promoting “crony capitalism” and termed it “hum do humare do”.

Sitharaman said the Union Budget 2021-22 was the instrument through which Atmanirbhar Bharat was to be attained, and asserted that the government was also looking at “long-term sustainable growth”. “Instead of finding quick short-term solutions...we are looking at medium- to long-term sustainable growth, which will keep India in that kind of growth trajectory that will maintain us as one of those fastest-growing economies in the world,” she said.

Amid protests by farmers over the controversial farm laws, Sitharaman said the government had improved the balance sheet of the Food Corporation of India (FCI), which would help in minimum support price-based procurements by repaying loans that were due to the National Small Savings Fund. The FCI’s outstanding loans from the NSSF are estimated to have reduced from Rs 3.39 trillion to Rs 1.19 trillion by March-end, and Rs 58,000 crore by the end of the next financial year, she said.

The government has also additionally provided Rs 2,500 crore for capital infusion into the FCI, keeping it healthy to continue with its procurement and storage operations, she said.

The government should be accountable for the money it gets as tax, and therefore it has decided to make the Budget more transparent. Onboarding the food subsidy is a classic case of that, she said. “What you get as a Budget is what is there in it; no pushing things under the carpet.”

Responding to some former finance ministers who have called Budget numbers “suspect”, Sitharaman said there was an artificial increase in capital expenditure growth shown in 2007-08.

An increase of 62 per cent was shown in capex, which involved a fiscally neutral transaction of the government acquiring Rs 40,000 crore stake held by the Reserve Bank of India in State Bank of India.

The government has admitted a high fiscal deficit number and has given a glide path to lower the deficit without affecting or creating hurdles in the path to growth, Sitharaman said. The Centre's fiscal deficit would rise to 9.5 per cent of the country's gross domestic product (GDP) in the current financial year, according to revised estimates against 3.5 per cent pegged in the budget estimates. The deficit is slated to come down to 6.8 per cent next financial year.

She also said that giving stimulus for capital creating expenditure is one of the main features of the Budget coming after the pandemic. The stimulus is for revival, and systemic reforms which going to sustain India’s growth, ease of doing business, and sustain India as the leader in terms of entrepreneurial skills.

Pandemic relief measures

The government has provided Rs 2,567 crore, which has been credited into EPF accounts for employee and employer contribution for those drawing salary up to Rs 15,000 per month. The amount was given to 3.9 million eligible employees’ accounts in 263,000 establishments, Sitharaman said. The government’s initiative of paying employee contribution of EPF if companies hire the employees who lost their jobs due to the pandemic has also received a good response. About 146,000 establishments have registered and 775,000 new joinees, and 178,000 rejoined the workforce as on February 1, the finance minister said.

A total of 9,100,000 MSMEs have benefitted from the Emergency Credit Line Guarantee Scheme, with the total amount sanctioned being Rs 2.43 trillion, of which Rs 1.78 trillion has already been disbursed, she disclosed.

Referring to the false narrative of the government “works only for cronies, Sitharaman said, “'Damad' (son-in-law), I didn't think is the trademark of Indian National Congress... Loans sanctioned under the Mudra Yojana - more than Rs 27,000 crore. Who takes Mudra Yojana? Damads?” she asked.