Addressing a virtual event of industry body PHDCCI Sitharaman said careful monitoring and tackling of fiscal deficit was the “mool mantra” of the budget 2021.
The Centre’s fiscal deficit increased, as it was forced to offer relief packages in the wake of the epidemic, despite a decline in revenue collection. Even though nominal GDP is expected to reverse a contraction in the FY22 and expand at 14.9%, the inevitability of continued spending to continue growth has led the Center to keep the fiscal deficit target elevated at 6.8% for the next fiscal as well.
She said that the government has managed to make the Budget transparent. “There is nothing under wraps or swept under the carpet. Whatever the government is borrowing or spending is open for everyone to see,” she emphasized.
The government has spent big on those areas that provide a big multiplier effect, she added.
The finance minister said while the government can roll out a stimulus package to revive the economy, the crucial task of funding long-term infrastructure projects will be undertaken by the proposed development finance institution (DFI). She communicated the expectation that numerous private development finance institutions (DFIs) would come up, making the whole cycle of financing framework serious (competitive).
The Budget has proposed a capital infusion of Rs 20,000 crore into the DFI. Using this, will likely raise resources to Rs 5 lakh crore over the next few years and help finance infrastructure projects.
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