FM Nirmala Sitharaman reveals rationale, explains walking tightrope on Budget

Do you think your Budget will be rated on the fact that it is the dream for economists but as far as the aam admi is concerned, laddu nahi diya aapne haath mein (There's no lollipop for the common man)?
I think we have looked at every section of the society, particularly in a pandemic affected time and when we are coming out of it, we have looked at where sustainable growth can be achieved. What is growth actually? If there is activity, if the economy is on the right track, jobs are being given and investments happening so that more production or more service can happen, that in turn will also need more people to come and work and as a result the economy will benefit in every segment.

Now investments are certainly coming not just from outside but Indian businesses, which have also gained from reduction in the corporate tax two years ago before the pandemic, are also coming on board to expand capacities or to expand capacities through mergers and acquisitions. That is the macro picture.

At an individual level, we are making sure people have houses, they get water in their houses, have gas cylinders given to them, that their villages are connected by roads and that the village has all kinds of facilities so that they can commute and take their goods and wares to the urban market. We are trying to give them the benefit of internet connection because today digital payments are all active.

I think these are the things which are being done keeping individuals in mind. Now I do not know how many of them will say that they did not get anything, but I like to remind them that they probably come from certain places where they did not have water connection till now, they did not have road connection till now, they did not have electricity till now. I will straight away say if this is the kind of thing even the Opposition is playing up by saying one India, two India, it is the two Indias that they have created that we are trying to bring together as one India. We want to make all Indians feel that they are part of this developmental raftaar.

We are trying to bring all together by giving every kind of facility, bank accounts, DBT, payment to the farmers and even money for building houses with toilets. Which prime minister will ever speak about it on the independence day from the Red Fort? Prime Minister Modi did it.

We responded to the various stresses we saw. There was immense suffering during the Covid. People from various sections have suffered and at that time our response was first to reach some relief so that people have something in their hands, they can do something, to give them food. Then, of course, there was the issue of hospitals getting oxygen, getting medicines, till we had the slight relief offered by the vaccines. Once the vaccines came, we took it up in full earnestness to ensure that vaccines reached people.

Meanwhile, we gave small businesses some kind of a sovereign guaranteed assistance through banks. It is not only the government, reputed private researchers are all coming out with figures to say that it has been a lifeline for MSMEs. So it is not as if we are saying that we are indifferent to the problems, not at all. We are responding to the problem and yes it is the right of the opposition to stand up and say there is suffering, you please attend to it. That is absolutely well taken.

But to speak as though nothing at all is happening, is wrong. Let me remind you, he (Rahul Gandhi) belongs to the party which sold and made profit out of vaccines given by the central government to the states.

But the person under whom that money was made is now your alliance partner and no longer with the Congress party. Captain Amarinder Singh was the chief minister in Punjab.
Well reminded! For that matter, if he is so honest, he should have removed Captain Amarinder Singh then and there. Did he? No. he wanted him there. Now when Amarinder Singh has left, you badmouth him. But who was behind the profiteering on the vaccine?

You are saying Rahul Gandhi was?
No, let him at least point out who was responsible. He did not take action on anybody at that time.

Okay if this is the case, what about Rajasthan? Vaccines were found in dustbins and the same government continues. Even today there has been no action. I have said this in the parliament also.

Former finance minister Mr P Chidambaram held a press conference right after the Budget presentation and repeated some of the facts that were stated by Mr Rahul Gandhi. You have commented on his statement saying that for a party that claimed 1991 opened the country to the world. to say the Budget was a capitalist speech is a certificate. What do you mean by that statement because Congress has called it a Budget for capitalists and a Budget for corporate India.
That is why I am saying it is a certificate. But if he meant a capitalist budget is like a terrorist budget, I will have to say that they were the ones who opened the door to capitalism. They brought about the so-called transition from socialist India to capitalist India. We have always said we believe in individual enterprise. We believe in the capacity of individuals to create business, give employment and create wealth in the country, we look at them as wealth creators and jobs providers.

Prime Minister Modi has never hesitated to put out the red carpet. He said we would remove the red tapism and we have professed to do it. Our manifestos have said it. Our earlier version Jana Sangh has said it, nothing hypocritical about it. If the Opposition is trying to mock me by saying that this is a capitalist budget, then don’t claim glory for ‘91 Budget. They opened up India and all of us said oh great after that they stopped. Vajpayee took it up. We have taken it up. We are moving forward on that agenda.

It is common to say capitalists are wrong. I am not a crony capitalist. I am not promoting my daughter!

Mr Chidambaram also pointed out two important figures. One is the decline in per capita income from the period of 2019-20 to 2021-22 from Rs 1,08,645 crore to about Rs 1,07,000 crore. The bigger problem is the decline in per capita expenditure and this is where the issue of the middle class, the salaried classes comes in. Expenditure is declining per person because people do not have money to spend, people have lost jobs and faced salary cuts. There is a rising unemployment.
Well, these are very sensitive times and people are living in a pandemic environment. We are making sure that the economy will revive. I fully understand it but have I increased anybody’s rates?

Is ke liye thank you bole (Should we thank you for it?
No I did not say that. People like you are the first ones to jump to conclusion before I finish a sentence. Anything that I say will be misconstrued and you are misconstruing already. I am not asking you to thank me for not raising the tax. I wanted to give tax stability to an individual to plan their businesses. Reducing taxes could give a relief but it could also have an implication in many different ways.

Therefore tax stability, continuity in policy and GST. I must thank the GST Council. Even two years ago, when the council met and there were proposals for rationalising the rates on certain items, the council in its collective wisdom said time is not appropriate to rationalise taxes. When one takes up an exercise of rationalisation, it means in some items it might go up; in some other items it might come down but it will certainly mean that there will be ups and downs which the council did not want. I am very grateful they took that call.

After that, till today, the GST Council has held back anything on rationalisation saying we should not increase the burden. That is very good. Similarly, for a government which had to stand by the people and give as much as we could to help people increase the budget on MGNREGA, it is absolutely justified, I am not grudging it. Look at the rural economy. Look at wanting to support the farmers by making sure that rural incomes are kept up. I would have had all the temptations to say something. The media was speculating about a Covid tax.

The Prime Minister was very clear from day one of the last budget preparation and this budget preparation that we would not increase one paisa as revenue for meeting our commitments in these days for Covid. We did not raise any taxes last year, nor did we increase any tax this year. I want to underline the facts. These are difficult times for everybody. I have to be conscious and I am conscious. Am I being frank enough!

So, I do not want you to be grateful at all. But I just want to remind you that I had grave temptations but I did not yield to it. Would it be an answer that you want to hear?

The 35.4% increase in capital expenditure this year got the headlines. But since last year’s allocation was not fully utilised, the kind of jobs and the investments that were expected did not happen. The biggest problem in the economy today is unemployment, 8% in the formal sector. What in this Budget is the solution for those jobs in case you do not meet the target of capital expenditure this year?
Last year, when we increased the capital expenditure for the first time to that extent, we took it up to Rs 5.5 lakh crore. On February 1, the Budget was announced. Sometime well before March 31, the Budget is passed. In fact, it got passed even a bit early because of the second wave in April and its impact was literally on the first quarter.

In that quarter, the speed with which we wanted the capital expenditure to go to the ground was slowed down. As a result, what was achieved in the first quarters moved to the second, moved to the third and so on. So while I have closely monitored it as regards the central government, the Honourable Prime Minister himself some time during the late half of second quarter or early third quarter had mentioned it to all the departments, saying for nothing else but for the revival of the economy, please ensure that it is fully utilised. Ministers went back and did their very best. Now till December, about 65% to 66% had been achieved and hopefully till March it will go up to 80-82%. That is the real picture.

Last year, we made an announcement that we will give Rs 10,000 crore to the states so that they can do what they want rather than be guided by the Centre’s, ‘one size fits for all’, policy.

Many states hesitated to join initially but afterwards they also came and it was increased to Rs 15,000 crore within 12 months. This year, I have given states Rs 1 lakh crore, 50-year interest free amount purely for capital expenditure. Why is that? It is because we want big ticket expenditure to happen at the state level for asset creation and that will mean immediate projects leading to jobs so that attention is given for job creation.

Subsidies are going down. Economists would appreciate the fact but many people say the agriculture sector has not got as much as it needed. MGNREGA allocations are slightly down. Health allocations are slightly down especially in the middle of Covid. If these expenditures go down, do you think it is going to augur well for these sectors?
They have not gone down. Yes if you were to compare RE with BE, you will find it is lesser but BE to BE it is probably the same or in most cases it is more than what was given last year. In some cases, it is exactly the same amount and that is because the way in which finance is managed given amount in BE and most of these programmes are demand driven, when MGNREGA workers come to roll on, they come and enlist themselves, then it is catered to.

When the demand went up, we increased the amount from Rs 69,000-70,000 to Rs 1,11,000in 2020. This year too, like last year, we have given exactly the same amount to start BE to BE and if there is more need, then via the second supplementary demand, the third supplementary we can always add up.

Health has not been given less amount. The various different heads under which health receives money have got increased allocations. But vaccination now may not require that much but we will still fund it as long as all eligible population get it.

All programmes stand like PM Kisan Samman Nidhi last year. The global prices of fertilisers skyrocketed. Like petrol, we imported urea material, we took the hit but we did not shift the burden to the farmer. These are contingencies which arise and we keep a provision to make sure that the contingencies are met when they arise. The contingency may be on fertilisers today; tomorrow it can be on anything else. I am ready for that.

You are ready so that a cushion is available?
Yes.