No new borrowings to fund extra expenditure, says Finance Minister Nirmala Sitharaman

Tribune News Service

New Delhi, December 21

The Rajya Sabha on Wednesday passed the Supplementary Demand for Grants, first batch for 2022-23, with Union Finance Minister Nirmala Sitharaman assuring the House that the gross additional expenditure worth around Rs 4.36 lakh crore will not entail any change in the government’s borrowing plan. It will entail net cash outgo of over Rs 3.25 lakh crore as some of the amount will be recovered by savings of ministries and departments or enhanced receipts aggregating over Rs 1.10 lakh crore.

The supplementary demand for grants is for food security, fertiliser requirements and providing support to the Indian economy, said Sitharaman while replying to the debate.

The highest amount of Rs 1.09 lakh crore will be towards fertiliser subsidy.

Replying to the discussion, Sitharaman refuted arguments put forward by P Chidambaram, Raghav Chaddha, Manoj Jha, John Brittas and others that the economy was in trouble. The Minister pointed out that major world economies were slipping into recession because of the policies they followed during the Covid crises when the tendency was to give cash handouts. India followed a targeted approach which revived growth without going into recession.

The Minister admitted that it will be difficult to double the size of the GDP in 10 years as was the case in the last two times. This was because of a one full year of Covid when the economy slipped into negative terrain. On the other hand, Sitharaman pointed out that the World Bank and the IMF have repeatedly called India a bright spot in the global economy.

She said inflation was declining continuously and the wholesale price index was down to 5.8 percent which is the lowest in the last 21 months. “We are keeping a good eye on inflation that is purely extraneous nowadays because of fuel and fertiliser prices,” she said in this respect.

On freebies, the Minister said if there is transparency and no fiscal laws have been bent, “there is no debate over it”. But newspapers are highlighting that one state government is unable to pay salaries on time. “It is perhaps because sums are being used in giving advertisements all over the country and the state government remains incapable of giving salaries,” she wondered.

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