The government is confident of achieving growth close to 11.5 per cent or even higher in FY2022, Minister of State for Finance Anurag Thakur told Business Standard in an interview. He added that while the new fiscal consolidation roadmap looked challenging, the government had a proven track record of fiscal discipline.
"The government had brought down the fiscal deficit from 5.6 per cent in 2013-14 to 3.4 per cent in five years. The pandemic has made all economies suffer. Now, we have given a new fiscal consolidation roadmap, which looks challenging, but we are known for fiscal prudence and we will achieve this," he said. The Union Budget has pegged fiscal deficit at 6.8 per cent for the coming financial year and aims to bring it back below 4.5 per cent by FY26.
Speaking on growth, he said that when the government took over in 2014, India was rated among the fragile-five economies. "From there, for the next five years, we achieved 7 percent growth. Even the IMF 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.
The member of Parliament also said that the government is focused on a clean up exercise in the banking system and setting up a bad bank was among the steps in that direction. "We did a thorough asset quality review in 2015-16 and then we pumped close to Rs 5.5 trillion into the banking system as a capital infusion. Even now, we have allocated Rs 20,000 crore for capital infusion. We are very clear about strengthening our banking system. We are also looking at the pushing digital economy through the UPI payment, or any other options that we might have. Now whether the bad bank is a good idea or bad that has to be seen in the future. But yes, we are going ahead with that," Thakur said.
The government plans to increase infrastructure spending in the next fiscal year, which will put health and economy, upended by the Coronavirus (Covid-19) pandemic, back on track. He said, "We have been listening to everyone in the society, whether it is farmers, businessmen, traders, economist, leaders, political leaders, saying government may come up with the Covid tax and wealth tax and all that. We didn't put even one rupee in new tax on anyone. No additional burden on any individual. At the same time, we are going to spend 34.5 per cent more on capital expenditure, whether it is healthcare, road, railways or even other social sector programmes such as Jal Jeevan Mission. The spending is further going to help people get more jobs, more money in their hands and enhance their spending power, which aids the economy."
On the Budget's vaccination allocation of Rs 35,000 crore, he said that if additional money will be required, the government will be able to provide that. "The prime minister made it very clear to that to fight the pandemic, India will go all out and so far India has been very successful. While the first thing is to come out with two Make in India Covid-19 vaccines, the second step is to supply it to more than 100 countries in a short span. It is about making India Aatmanirbhar and also fighting the pandemic. Last year we had provided Rs 15,000 crore to buy PPE kits, masks, ventilators and other essentials for it. We have given Rs 50 lakh insurance to the frontline warriors. Now, once the vaccine is out, we have allocated Rs 35,000 crore.
To fill the deficit gap, which has widened due to lower revenues and because of a lack of success in achieving disinvestment targets, Thakur said that the government would be able to fulfil the plans to privatise companies like Bharat Petroleum, Air India, Concor and others, as well as two public sector banks and one insurance company. "I'm very hopeful that we will not only be able to meet the target of Rs 1.75 trillion, but will achieve more than that," he said.