Daily News Capsule

Finance Minister Nirmala Sitharaman on Tuesday explained the government’s priorities to the Reserve Bank of India’s central board during their first meeting after the presentation of the Union Budget 2021-22.

As per the tradition, the Finance Minister holds customary meetings with the board members of the RBI and the Securities and Exchange Board of India (Sebi)  every year after the presentation of the Budget.

The RBI said in a statement that the FM minister addressed the 587th RBI Central Council, informing members of key budget initiatives and government priorities.

“Complimenting the finance minister on the budget, the board members made various suggestions for consideration of the government,” it added.

At its first meeting after the presentation of the Budget for 2021-22, the central board of directors also reviewed the current economic situation.

“The board in its meeting reviewed the current economic situation, global and domestic challenges, and various areas of operations of the Reserve Bank, including ways for the strengthening of grievance redress mechanism in banks,” it stated.

The meeting on Tuesday was led by RBI Governor Shaktikanta Das through video conferencing.

The government’s nominee directors on the board — Financial Services Secretary Debasish Panda and Economic Affairs Secretary Tarun Bajaj — also attended the meeting.

Apart from Sitharaman, Minister of State for Finance Anurag Singh Thakur, Finance Secretary Ajay Bhushan Pandey and Department of Investment and Public Asset Management Secretary Tuhin Kanta Pandey were also present.

Earlier this month, the finance minister presented a Rs 34.5 lakh crore-budget for 2021-22 in the backdrop of the coronavirus pandemic.

The budget has emphasized increasing capital expenditure, raising allocation for healthcare capacity building, and development of agriculture infrastructure, among others, which are expected to have a multiplier effect on the economy.

Hit hard by the pandemic, the fiscal deficit — the excess of government expenditure over its revenues — is estimated to hit a record high of 9.5% of the Gross Domestic Product (GDP) in the current fiscal ending March 31.

For the subsequent 2021-22 fiscal, the deficit has been pegged at 6.8 percent of GDP, which will probably be additional lowered to 4.5 percent by the fiscal ending March 31, 2026.

Earlier this month, Das mentions that the central bank will able to manage the high quantum of government borrowings at Rs 12 lakh crore for the next fiscal in a “non-disruptive” manner.

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