economy: Fiscal Prudence Remains Top Priority: Finance Minister Nirmala Sitharaman

Finance minister Nirmala Sitharaman on Tuesday said fiscal prudence without compromising on judicious social welfare spending remains the cornerstone of the government’s policy.

Replying to a debate on the first batch of supplementary demands for grants for FY24, which was approved by the Lok Sabha on Tuesday, Sitharaman said the Narendra Modi-led government has adopted realistic budget-making in recent years.

This is reflected in the fact that the Centre now presents two instead of three supplementary demands for grants in a fiscal year to meet additional spending requirements, she said.

The government intends to reduce its fiscal deficit to 4.5% of GDP by FY26 from the budgeted 5.9% for this fiscal year.

The minister stressed that the economy is “moving in the right direction” and “macro-economic fundamentals are fine”. India remains the world’s fastest-growing major economy and its September quarter growth of 7.2% was also the highest in the world, she added.

Sitharaman defended last week’s decision to ban onion exports to shore up domestic supplies, saying sometimes the consumers need to get priority over producers for availing of essentials at reasonable rates. The government has always sought to balance the interest of farmers with that of consumers. And while doing so, it has often been “more inclined” towards protecting farmers’ welfare, she said. The minister also cited data to stress that both minimum support prices and procurement of crops have been raised “multiple times” since 2014 benefiting farmers.Sitharaman said an extra ₹20,000 crore is being provided for the rural employment guarantee scheme in FY24, over and above the budgeted ₹60,000 crore, and the government will provide more if needed to cater for the “demand-driven scheme”. The government had on December 6 sought parliamentary approval for an additional net spending of ₹58,378 crore in the first batch of supplementary demands for grants in this financial year.Despite the additional outgo, officials have expected the government to meet its fiscal deficit target of 5.9% of gross domestic product (GDP) for 2023-24.

The demands involve gross additional spending of more than Rs 1.29 lakh crore in this fiscal, a significant chunk of which, ₹70,968 crore, will be met through savings or enhanced receipts of various ministries and departments.

In response to opposition members’ questions over the fate of BSNL, she said the government has earmarked ₹11,850 crore for capital infusion into the state-run telecom firm. At the same time, she accused the UPA regime of leading the company into a mess. “In every budget, we allocate funds to the BSNL,” she said.

The minister also responded to complaints by certain opposition members about the delay in the Centre’s release of funds to states. Sitharaman said the transfers are done strictly in sync with the rules on receipt of utilisation certificates.

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