Budget makes a directional change, to encourage entrepreneurial spirit: FM

Nirmala Sitharaman says it raises resources without increasing tax rates, asks industry to invest now

Union Finance Minister Nirmala Sitharaman on Thursday said the Budget for the fiscal year 2021-22 marked a clear directional change that would unleash entrepreneurial spirit. She said the Budget raised resources at a time when a lot of money was required to be spent, but kept the tax rates intact.

Addressing the FICCI’s national executive committee meeting through video conferencing, Sitharaman said: “It’s a Budget which raises resources but not on the back of increased taxation. There is a directional change in the Budget, which is so distinct that it will fuel the entrepreneurial spirit which Indians show given the right opportunities.”

Earlier, speaking with Business Standard, MoS Finance Anurag Thakur said the government was confident of achieving growth close to 11.5 per cent or even higher in FY22. “Even the IMF (International Monetary Fund) and other such institutions have projected India's growth close to 11.5 per cent in 2021-22. I am hopeful that we're going to achieve this or maybe better than this,” he said.

He further said though fiscal consolidation road map looked challenging, this government had a proven track record of fiscal discipline. The Union Budget pegged the fiscal deficit at 6.8 per cent for the coming financial year and aimed to bring it back below 4.5 per cent by FY26.

At the FICCI event, Sitharaman said she was confident that revenue generation would improve through this year. "We are confident that we will be bringing in non-tax revenue other than just disinvestments through various other monetisation of assets and so on."

Sitharaman urged industry to come forward to make investments.

“I hope industry will understand the spirit with which the Budget is placed before you and, therefore, also come forward to participate in this inevitable exercise. Industry, having cleared all its debts and finances, should now be in a position to invest money to expand and grow, and clearly show signs that it is now ready to receive any joint ventures for the sake of technology that it prefers to have,” Sitharaman emphasised.

 The finance minister further stated for providing immediate stimulus to the economy, the government will be spending in a big way in public infrastructure and three large areas where big-ticket expenditure will happen, including infrastructure, health and agriculture.

“The government alone, even if it brings bags full of money, cannot just meet the demand of the growing and aspirational India,” she said.

On development financial institutions (DFI), Sitharaman said:" We will enable one DFI and the entire financing of long-term infrastructure will happen in a very market-driven way. That itself will bring in efficiency."

The government, Sitharaman said, has made a confident, trustworthy, and transparent accounting statement in the Budget. “There is no patching up or whitewashing. It is an honest attempt to give an honest statement of the government’s finances and with the reforms announced, along with the stimulus. It is clear that this government is not sitting cautiously, and it is coming forward with faith in the Indian industry and business leaders,” she said.

 The government cleared the dues of the Food Corporation of India, which together with Atmanirbhar packages, would raise its fiscal deficit to a whopping 9.5 per cent of gross domestic product in the current financial year, against 3.5 per cent projected a year ago. For the next year, the fiscal deficit was pegged at 6.8 per cent of GDP.