Fiscal deficit quality more important than deficit stats: Amit Shah

India should shift its focus from the percentage to the quality of fiscal deficit, union home minister Amit Shah told ET, adding that what was important is to ensure that extra money is invested in “productive” ways.

In a wide-ranging exclusive interview to ET, Shah said there was no “requirement” to withdraw the ban on Chinese apps, saying “our own apps have captured the space”. He also claimed that BJP will sweep the elections in West Bengal, form governments with allies in Assam, Tamil Nadu and Puducherry, while emerging as a “third pillar" in Kerala.

“People of Bengal are ready for change. We will win more than 200 seats. (In Assam) there will be an NDA government under BJP with a clear majority. (And) we are likely to form the government with our allies in Tamil Nadu and Puducherry. In Kerala, BJP will emerge as a third pillar and break the dominance of the LDF and UDF.”

Responding to a query on the rising fiscal deficit, Shah said: “It’s not the fiscal deficit numbers but the quality of fiscal deficit that matters. If deficit increases due to outflow for higher salaries, charity or populist programmes, then it’s a matter of concern. But if it rises due to investment in infrastructure creation, industrial development, irrigation works, then it’s productive fiscal deficit. In a country as large as ours, we should not worry about fiscal deficit statistics but look at the quality of fiscal deficit.”

Further, Shah said the government was taking a relook at the bankruptcy code and may bring changes where necessary.

“We made a committee, which has submitted its report. I cannot discuss the details. A GoM also exists on the subject. All I can say is that there should be flexibility to make changes in any law. The bankruptcy code was made with the objective to ensure transparency on bad loans and their recovery, to prevent corruption. For this, whatever is needed to make the code practically implementable, should be done.”

On the second Covid-19 wave, Shah said that he expected the rapidly rising vaccination numbers to “break the cycle” of the second surge in Covid-19 cases at some point, adding that there was not even the “slightest shortage” in vaccine supplies.

“No state has a problem and if some state wants more, we are sending it to them. To say something politically is one thing and for stocks to finish is quite another,” he said.

Shah said he was “optimistic that there won’t be much of a drop (in growth) in this quarter”, owing to the rise in cases.

Besides this, the home minister affirmed that the government was committed on its privatisation proposals. On protest by unions and employee associations, Shah said while the government will talk and explain its proposals to all stakeholders, it will not reverse its decisions.

Responding to a query on rulings by overseas arbitration panels against India, the home minister said that a panel based in Singapore could not nullify a law passed by the Indian Parliament, referring to the retrospective law enacted by the UPA government in 2012.