Finance Minister Nirmala Sitharaman said on Monday money being received from widening fiscal deficit is not being splurged, quite contrary to what had happened in the UPA regime.
It is being spent on creating assets and improving logistics, connectivity, health sector in remote areas, she said at a FICCI event. “I am going to tell you that when India had real tough economic situation, money was splurged by the government then in expectation that the economy would rise from the bottom that it had reached. These are all fresh in our minds,” she said. “Now, money is being clearly directed where it should go,” she said. For instance, the money to be received from the health cess would go for creating the health infrastructure in aspirational districts, which do not have hospitals as such, she said.
On being asked why the markets were not happy on the Budget day, the FM said: “But I see them being happy today (Monday). Monday is the true working mood, and today’s mood is that they are happy. Aren’t they? Not exuberant but happy somewhat.”
“You may want the government to pump prime the economy, to use the socialist expression. Yes, we are willing to do that but we shall not repeat the mistake of splurging that had happened,” she said.
She said expenditure on infrastructure will have cascading effect on the economy.
The UPA government had widened the fiscal deficit to over 6 per cent of the gross domestic product (GDP) in 2008-09 to revive the economy facing the ripple effects of the collapse of Lehman Brothers against the Budget Estimates of 2.5 per cent that time. The Manmohan Singh government gave the fiscal stimulus to the tune of over ~1.8 trillion that time.
Talking about the Citizens Charter that will come in the statute, Sitharaman said this is being done to invoke those provisions in the law so that tax payers are not harassed.
She said her ministry is motivating tax officers to meet the collection targets and not forcing them to do so.
“It is the intent of the government to trust the assessees. For that purpose, technology is being given a bigger role,” she said.
The FM said the government is transparent and clearly showing where the money will come from and where it will go. She said the Budget may not have given anything sector-specific, but it was a macro blueprint.
The finance minister further said Budget proposals are not de-linked from ground realities as the finance ministry officials took various suggestions from the stake holders even though there is an impression that sometimes bureaucrats have Lutyens’ approach.