Addressing industry captains during a virtual interaction with the Confederation of Indian Industry (CII) on the Budget, she said stress has been on areas with high multipliers such as infrastructure.
This would facilitate the private sector in areas such as power, roads, ports and airports, among others. Health care and agriculture are the other priorities, she said.
The government will provide some capital to the proposed Development Finance Institution (DFI) and the DFI will also raise funds from the market, Sitharaman said. In addition, the DFI Bill will provide legislative space to private DFIs, she said.
Similarly, the asset reconstruction company (ARC) for the management of non-performing assets (NPAs) will be floated as a holding company by banks themselves, with support from the government.
The Budget raised capex by the government to Rs 4.39 trillion in the revised estimates (RE) of the current fiscal year from Rs 4.12 trillion in the budget estimates (BE).
It further projected capex to rise to Rs 5.5 trillion in the next fiscal year, a surge of 25.3 per cent over RE of the previous year.
This, together with various packages announced by the Centre for vulnerable sections and to lift the economy out of the Covid impact, meant that the government raise its market borrowings from BE levels of Rs 7.8 trillion to Rs 12.8 trillion in the RE of 2020-21. It also projected these borrowings at an elevated level of 12 trillion in the coming year. This gave rise to apprehensions that resources for the private sector could be crowded, which government officials did not agree with.
Sharing the key guiding principles for the Budget, Sitharman emphasised on transparency. “Contrary to expectations of a Covid-19 tax, the government has chosen to fund the Budget stimulus through higher borrowings, rather than increased taxes,” she said.
Urging a continued dialogue, Sitharaman said her interactions with the CII helped bring in ‘contemporary thinking in policy making’.
The finance minister promised an ‘honest leakage-free implementation’ of the Budget proposals.
CII president Uday Kotak said the Budget was an example of an outstanding policy document which addresses the needs of the economy. Kotak appreciated the boldness of the Budget announcements, and the focus on growth and transparency.
He complimented the Budget team for the mindset of encouraging private enterprise and respecting the markets.