Interview | Budget 2020

Budget 2020 | I appear conservative, but I want to be realistic, says Nirmala Sitharaman

Finance Minister Nirmala Sitharaman. File

Finance Minister Nirmala Sitharaman. File   | Photo Credit: Kamal Narang

‘In today’s environment where public spending is used as an engine for pulling the economy up, my focus will be on spending to create assets’

A day after presenting her second budget, Finance Minister Nirmala Sitharaman, in an interaction with presspersons, said the government’s focus was on pulling the economy up from its present slowdown by investing in infrastructure and asset creation that will generate jobs.

You said inflation is well-behaved and the economy’s fundamentals are robust, but have assumed a conservative 10% nominal growth. The 15th Finance Commission had assumed an 11% nominal growth for the year. The Economic Survey also sees a more optimistic real GDP growth to rebound to 6-6.5% in 2020-21…

The Economic Survey gives a lot of ideas and their assessment of the growth for the coming year. The Ministry has also been conscious of the specific progress made between the last budget in July and now. Given today’s environment where public spending is being used more as an engine for pulling the economy up, my focus will be on spending focused on creation of assets.

Infrastructure spending has a larger cascading effect. Revenue generation on the other hand, has suffered due to different circumstances. So if I look at this extreme that is not growing and that extreme which demands more for me, I will have to be realistic in the number that I can reach. Therefore, I appear conservative but I want to be realistic.

There is a fear that there will be lower investments in insurance and equity-linked savings schemes under the new lower tax rates regime, where exemptions for those are withdrawn

Today, in a country where you’ve moved out of this socialist model of governing your economy, opened up stock options, opened and proved that the bond market is also attracting retail investors, why cannot you trust the individual? It is he or she who has to take a call on, ‘I have this much money in my hand, I will go buy a vehicle or I will take 50% of it for the first instalment towards buying a house.’ It is up to them. This command-driven economy, where we incentivise going that route, no longer checks. I tend to believe that this incentive alone is not the reason for a person to consider insuring himself. He’s got to have his priority towards insurance and that’s his choice. So I don't think it will have a bearing. And if it does have a bearing, now the options are open, it will only go towards something else which is also going to help the economy and be a catalyst for more economic activity.

They can put it in mutual funds, buy bonds, that’s triggering a lot more activity.

There is also some concern about the TDS introduced on mutual fund dividends and capital gains for resident Indians.

First of all, TDS is reconcilable with your taxation itself, so you can offset if it can be accommodated within the fair tax that you have to eventually pay. So that’s not an additional tax.

During the last Budget, you had meetings with stakeholders and withdrawn the super-rich surcharge. If the market falls again on Monday (after Saturday’s 2.43% fall in the Sensex), will you again meet with stakeholders to see if there is a need to withdraw something?

That’s a very legitimate question to ask, but let us see what the markets are going to do.

You referred to the Harappan texts in your speech, which has led to some confusion, as people say the script has not been deciphered.

Deciphering of the hieroglyphs of Harappa has happened. You may want to interpret it in one particular fashion and I may want to interpret it in a different fashion, but on the deciphering, there is no dispute. The dispute may be did they come from anywhere else or are they natives to India. I'm not getting into that.

The Survey and the Budget talk of wealth creation and trust, and you are betting on a huge infrastructure boost. Late Finance Minister Arun Jaitley had talked about a reboot of the public private partnership framework in India in his first Budget, but nothing came of that. Could this be an opportune time to revisit PPPs?

I don’t know if you missed it. In every step that I announced, where I clearly recognise the role of the Centre and States working together or a central agency like the Railways looking at doing something more efficiently, we are all looking at PPPs models.

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Printable version | Feb 17, 2020 5:06:25 AM | https://www.thehindu.com/business/budget/i-appear-conservative-but-i-want-to-be-realistic-nirmala/article30721011.ece

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