Infrastructure

India will be ‘one of top economies of world in coming decades’: Sitharaman hints at more reforms

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FM Nirmala Sitharaman in Lok Sabha on Saturday (PTI image)

Undeterred by risks posed by the Covid-19 pandemic, the government has been undertaking reforms to ensure a sustained long-term growth path for the country, finance minister Nirmala Sitharaman said on Saturday, indicating that more reforms will be pursued going ahead.

Replying to a debate in the Lok Sabha, the minister said the Budget for FY22, with its enhanced allocation for capex, healthcare and the development of agriculture infrastructure, has set the stage for India to become self-reliant. It focused on sectors with high multiplier effect on the economy. “…reforms are going to lay a path for India to be one of the top economies of the world in the coming decades,” Sitharaman said.

The minister indicated the final utilisation of funds earmarked for the national rural employment guarantee scheme (NREGS) may be lower than the revised estimate of Rs 1,11,500 crore for FY21. Still, the allocation has been kept high to ensure funds won’t be a constraint should there be a fresh surge in demand. While the government has budgeted Rs 73,000 crore for the NREGS for FY22, it will allocate more funds, if required.

Demand for the NREGS soared this fiscal, thanks to the pandemic that forced millions of migrant workers to go back home where many of them tapped the scheme to eke out a living.

The minister said while the Congress-led UPA brought in the NREGS, it didn’t spend even the budgeted amount on the scheme year after year. For instance, even after the global financial crisis, the offtake under the NREGS stood at Rs 33,539 crore in FY09, against the budget estimate (BE) of Rs 39,100 crore. In contrast, the NDA government’s actual spending on the scheme has topped its budget estimate every year, she asserted.

The government has budgeted capital expenditure at Rs 5.45 lakh crore for FY22, which is 26.2% higher than the RE of FY21 and 34.5% larger than the budget estimate (BE) for this fiscal, as it sought to invest in productive assets to spur growth.

The International Monetary Fund has forecast a 11.5% real GDP expansion for India in FY22 and 6.8% in FY23. With this, India is set to return as the world’s fastest-growing major economy, beating China.

Responding to the Congress-led opposition’s accusation of crony capitalism, Sitharaman listed out a raft of measures — from the supply of free grains and cooking gas to the poor in the wake of the pandemic to the construction of rural houses and guaranteed loans — to suggest the government, in fact, has been working for the poor, the middle class and even small businesses.

At the same time, this government doesn’t hesitate to acknowledge the contribution of wealth creators to nation building. Unless business creates wealth, the government has nothing to distribute to the poor and migrant labourers, Sitharaman said.

Commenting on the PM Kisan scheme, the minister said the decline in the budgetary allocation for FY22 by Rs 10,000 crore (from the BE of this fiscal) was because of ‘rationalisation’ of expenditure, as West Bengal government didn’t share the list of 69 lakh beneficiaries with the Centre.

The minister justified the inclusion of water and sanitation in health expenditure to show more than doubling of spending on that head by citing a World Health Organization (WHO) report that sanitisation was a crucial component of healthcare.

Even the actual allocation for the ministry of health and family welfare has been raised by 9.6% for FY22 and that of the Ayush ministry by a whopping 40%, she said.

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