The Union Budget is now more transparent, Finance Minister Nirmala Sitharaman said here on Monday. She also emphasised that this Budget has two prominent pillars — expenditure on infrastructure and spending for capacity building in the health sector.

“We have made our accounts very clear. We have made it more transparent,” Sitharaman told media persons after presenting her Budget. “This means there will be least off-Budget borrowing and, barring a very small amount for the rainy day, all borrowings will be on the main Budget and, consequently, this will be reflected in the fiscal deficit.”

Later, Economic Affairs Secretary Tarun Bajaj said: “Borrowing is for investment. This will not push the inflation.” Bajaj further expressed confidence that deficit could be below the level projected in the Budget. “Our revenue figures are understated. On a nominal growth rate of 14.4 per cent, the revenue growth rate is projected at 16.7 per cent, which means 1.6 per cent buoyancy,” he said, adding that this is expected to help keep a check on deficit.

The government has revised its fiscal deficit estimate to 9.5 per cent of GDP for FY21 and 6.8 per cent for FY22. Fiscal deficit is derived from the nominal GDP growth rate. For the next fiscal, the nominal GDP growth rate has been pegged at 14.4 per cent and real GDP at 10-10.5 per cent. This is different from data from the Economic Survey, which estimated nominal GDP at 15.4 per cent and real GDP at 11 per cent.

When asked why there is a difference in these numbers, Sitharaman said that these two sets of numbers are prepared by two different institutions. “While the Finance Minister is conservative, the Chief Economic Advisor is flamboyant,” she quipped.

Qualitative spent

Giving a brief outline of the Budget, she said the effort is on qualitative spend and giving a demand push by more expenditure on infrastructure. “I choose to spend big on infrastructure. Also, I attempt to address the needs of the health sector through capacity building,” she said, while making it clear that more spending will create more job opportunities.

Talking about the proposed Development Financial Institution (DFI) to address the long-term credit need of the infrastructure sector, she said that there will be one with initial investment from the government and then there could be other DFIs to be set up by the private sector. At the same time, there will be asset reconstruction companies to be set by the private sector, besides one proposed in the Budget. Competition between public and private players will do good for the overall sector, the Minister remarked.

On the farmers’ agitation, Sitharaman said discussion is the way out. “If farmers have any question or doubt, the government is ready to clear that,” she said, recalling the Prime Minister’s remarks about options for deferring the laws still being on the table, and the Agriculture Minister being just a phone call away.

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