Replying to the debate on interim Budget in Rajya Sabha on Thursday, Finance Minister Nirmala Sitharaman countered the allegations of Opposition-ruled States that there is a bipartisan approach in devolution of revenues.
Ms. Sitharaman said the highlights of the interim Budget were the emphasis on capital expenditure and the efforts to manage fiscal deficit. She said allocations to education and health have improved and major flagship schemes of the Centre too will get more money in the Budget.
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‘Rise in labour participation’
Responding to the charges by the Opposition that unemployment has increased during this regime, she said labour participation rate has increased and unemployment rate has decreased in the last two years. “Women labour participation has risen to 37%,” she said. On inflation, she said both retail and core inflation has declined, and the Centre has taken steps to ensure essential items are available at reasonable price.
Ms. Sitharaman said devolution recommended by the Finance Commission is 100% followed by the Centre. “Whatever was recommended by the Finance Commission has been given. Payments are happening to the States in time and there is no due held back,” she said while countering allegations that the Centre is taking a step-motherly attitude towards Opposition-ruled States.
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‘Greater tax devolution’
On Kerala, she said tax devolution under the Congress-led UPA regime between 2004 and 2014 was ₹46,303 crore. “Between 2014-24, it is ₹ 1,50,140 crore. It is 224% increase,” she said and added that grants-in-aid was ₹25,629.7 crore under the UPA and the NDA government increased it to ₹1,43,117 crore, which is a 458% increase. For reviving the economy after the pandemic, she said special assistance was provided to enhance capital expenditure and additional borrowing was also allowed. “There is no reduction for Kerala,” she said.
Tamil Nadu, she said, received ₹94,977 crore as tax devolution under the UPA and under the NDA regime, it was ₹2,77,444 crore as of December 2023. Grants-in-aid was ₹55,924.42 under the UPA and in the last 10 years it is ₹2,30,893 crore, which is an increase of 300% increase, she pointed out.
The Finance Minister said capital expenditure for creation of public infrastructure is growing faster than real GDP growth under the NDA regime. “With the capital expenditure being in the focus, in the last three to four years, we have made sure that our debt management is done in such a way that we honour the glide path for fiscal deficit that we had given in 2021,” the Finance Minister said, adding that money spent on capital expenditure gives return compared to revenue expenditure. “So, public investment in infrastructure gives us greater returns,” she said.
The Rajya Sabha later returned the Appropriation (Vote on Account) Bill, 2024; The Appropriation Bill, 2024; The Jammu and Kashmir Appropriation (No.2) Bill, 2024; The Jammu and Kashmir Appropriation Bill, 2024; and The Finance Bill, 2024, completing the interim Budget process.
