In the course of preparing the budget, you have laid down a roadmap for a developed India. What are the key takeaways you intended for us?
This process started before 8 October, when Prime Minister Narendra Modi addressed the nation from Red Fort (on 15 August). We believe ‘Amrit Kaal’ as ‘Kartavya Kaal’ as well. For Viksit Bharat 2047, there have been comprehensive deliberations on what steps need to be taken. We have identified four major castes as priorities for development—women, poor, farmers and the youth. If we can fulfil the aspirations of all of them, they will progress, and because of that the country will also grow. This, in short, is what we have tried to say in the budget. To make this happen, we have devised various schemes, some of which were already present and some are new. For the country to progress, we are also encouraging innovation, which will play an important role. These will be shared in detail in the July budget.
There is little or no populism in your budget. What is the thought behind such a bold move with the budget ahead of the general election?
Our President, in her speech in the opening of the session for this calendar year, talked about 10 years of substantial systemic reforms and taking the route of empowering people and not going by entitlement. That is why when people have access to houses and electricity and you also have money coming through direct benefit transfer (DBT), you financially empower them and make sure that opportunities are given. So, the mantras that we used, whether it was ‘Sab ka saath, sab ka vikaas’, or making sure that you don’t differentiate between beneficiaries on any other score, except he deserves to get this, then there is actual development reaching on the ground. There’s no differentiating among people or denying them anything. Everybody gets everything which a specific bracket of people should get. There is no distinction over caste or religion. As a result in the last 10 years, we’ve actually laid the foundation for people to now think in terms of meeting their aspirations.
In this, the one particular aspect which I would think is a necessary corollary of all that we’ve done is the development of the East. I’m not combining East with North-East. If 60% of all the aspirational districts in India are in the East, which is West Bengal, Bihar, Odisha, Jharkhand, we want to give maximum attention to make them not just come at par, but to become engines of power to steer the new India to become Viksit Bharat. The vote on account budget was not seen as an instrument to tell people we can do this or we can do that without having performed in the last 10 years. We didn’t want any populism here. Our track record will explain it. We have tried to give an indication towards our direction, the targeted audience, how we will meet the targets, and what are the targets.
In the last 10 years, you have effectively created 500-plus million new stakeholders in the Indian economy. How do you see this playing out for the economy and society going forward?
That would be the trigger point for any consumption in the future, of not just basic necessities like food products, but consumption of services and education. Education not in terms of corporate education, but seeking skills and knowledge. The innovation fund has been set up for that. A large corpus has been given over five years and also making sure that some of the PM SHRI schools will be endowed enough. So much unused infrastructure is lying with various departments, which need proper synergy among them.
The vision statement for Viksit Bharat 2047 looks at three key aspects. What is the philosophy behind the allocation of ₹11,11,111 crore ( ₹11.11 trillion) for infrastructure?
In the last three-four years, we have adopted the route of public expenditure on infrastructure and asset creation. This was with the aim that recovery from covid is rapid, and which includes all sections of people. A report by RBI (Reserve Bank of India) has established the fact that economists around the world agree that if you spend ₹1 on capital expenditure, then one would get ₹1.45-1.46 as an effect in the short term. Instead, if you spend on revenue, it will be tough to get even 90 paise in return. After studying this, we opted for fast recovery from covid and chose the capital expenditure route. In two years, you can see that the recovery has been quick and was sustainable as well. So, capital expenditure will be important because we are looking at sustainable growth for the next three to five years.
You have not only stayed on the commitment of the fiscal glide path, but you have improved on it. It gives RBI room for manoeuvring its monetary policy. Can you comment on this?
The emphasis that we are laying on being fiscally prudent without affecting our schemes, without denying funds anywhere and by avoiding wastage—that is why we repeatedly talk about DBT and it has given us ₹2.5 or ₹2.6 lakh crore in terms of savings which would have otherwise gone waste. So, we brought in technology and synchronized it with biometric validation and were able to save money. The prudence is not just in cutting expenditure, but improving revenue and avoiding wastage. Taxpayers’ money has been treated with the due respect that it deserves. That is why today we’re better on our fiscal deficit numbers this year and for the next year as well.
Prime Minister Narendra Modi has congratulated you for an inclusive and innovative budget that displays the confidence of consistency. Was it a conscious decision to focus on women empowerment?
This is not only a weapon of empowerment but something that has been long-awaited. If you see, it’s not just about the Women’s (Reservation) Bill, which is a top achievement. Since 2014 till today, when Prime Minister Modi was the chief minister of Gujarat, even then women empowerment was an important factor. In every sector, women are receiving special provisions. Despite the fact that women have been present in the space sector for a long time, the kind of recognition and appreciation they are getting today didn’t happen earlier. Not just women-centric development but women-led development was something that was appreciated a lot in G20. Prime Minister Modi takes the issue of women empowerment very seriously. In every major programme of his, whatever provisions need to be made to make this happen are done. In the coming days, whether it is Lakhpati Didi (scheme) or anything else, you will see a lot more of this. If in a village, drone technology is in the hands of women, it’s a powerful statement. The prime minister personally oversees that women are encouraged in all fields, whether it is sports or anything else.
In the run-up to the budget, RBI revised its GDP growth projection upwards pretty sharply, then the CSO (Central Statistical Office) came out with an even higher estimate. Are you looking at a new trend rate of growth to the Indian economy, as opposed to the previous rates?
It will be too early for me to say that. However, I’m seeing that kind of buoyancy. I’m seeing that kind of energy coming out of every sector. Earlier, you would find that in manufacturing, whether motorbikes or passenger vehicles, if you had a trend coming, you couldn’t say that of any other sector. And you couldn’t certainly say that of services. Today, the way in which the Indian economy is positioned, largely because of the drive that the Indian public is showing, you find every sector is revving to move fast. So, it is safe for you to assume that it is not going to be confined to one or two sectors, but the pattern with which growth is happening is where every segment is contributing to it. There is no one segment which is going to pull it down because of peculiar situations for them. Peculiar situations are being overcome because of the aspirations and the drive and the positivity that is there in the economy.
For the first time, income tax collections have exceeded corporate tax collections. We also saw that among the slabs, there is a wealth effect which is operational. Is this what you are referring to as growing aspirations manifesting in income streams?
Partly, yes. It is also that newer areas of activity in which earlier people wouldn’t tread upon are now opening up opportunities. For instance, space is a classic example. India’s space industry has been there for a long time and doing well and it’s not as though they have succeeded only now. However, the energy with which it is growing now and the components which can be given by private participation, like startups contributing to space sector, are giving them a multiplier effect they didn’t have earlier. As a result, what is happening is that the contribution to the GDP is coming from areas which earlier did not even exist. That is why GDP’s composition will have to be studied for what it is now, because newer areas that were not recognized until now have suddenly spurred growth. I took the example of space and startups, which are equally contributing and therefore giving us solutions that are applicable in many other sectors as well.
What is the vision and strategy behind the ₹1 trillion innovation fund and how will it work?
I won’t be able to speak on this in detail right now. However, broadly, we are providing capital which is interest-free, and they will get a cheaper corpus because of that. There can be a government company or a special purpose vehicle that will be created for this. In five years or so, they will get an opportunity to do business with cheaper capital. I believe this is a major step forward. When this fund will be implemented, for both small and large innovations, the multiplier effect for development of the sector will be significant. Even if it leads to a small innovation in a particular aspect, it will positively impact the entire sector. Just like in payments in India today, look at the scale in which (digital) payments are done even in smaller villages.
You also identified DPI (digital payments index) as a factor of production. Combine it with all the basics that are being provided, in terms of physical infrastructure—is India now looking to harvest its digital dividends?
Undoubtedly, yes. Now, the India stack as a whole or in some bits—some countries may need it and we are willing to extend that help. Private players in the sector are also finding new marketplaces where they can go and sell it or make money out of it. Or they can provide that technology for one or the other exchange of goods or it can be for whatever terms and conditions which a private person would want to do. So, India created public infrastructure, made it available for private parties and for small medium fellows who all want to get on to that and benefit. As a result, the Indian economy got traction. But those who contribute now in building on the public infrastructure also stand to benefit because they themselves are taking that produce, which is essentially a public infrastructure foundation, building on it and that itself is becoming a commodity for transactions.
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Published: 02 Feb 2024, 01:33 AM IST