MUMBAI: Finance Minister Nirmala Sitharaman is not concerned about the impact of the fiscal stimulus announced in the Union Budget today on inflation and believes that she will manage it when the time comes.
“Don’t think I will worry about inflation, but will keep an eye on it,” Sitharaman told ETNow in an interview.
The finance minister today announced a pro-cyclical Budget with outlay on capital expenditure rising over 30 per cent to Rs 5.5 lakh crore. Further, the government has projected its spending on healthcare to grow by over 137 per cent to Rs 2.2 lakh crore. The Budget has pegged the government’s fiscal deficit for 2021-22 at 6.8 per cent of GDP, which is sharply higher than economists’ estimate of 5.5 per cent.
The finance minister also said that there was no proposal to bring a COVID-19 cess and that she did not want to provide a stimulus to the economy by raising taxes. “We shall not tax them (citizens) further,” the finance minister said.
Sitharaman said nearly 17 per cent growth in tax revenues projected for 2021-22 is not conservative but “realistic”. The government has projected tax revenues to rise 16.7 per cent to Rs 22.17 lakh crore.
On the asset reconstruction company and asset management company to be formed for taking over bad loans of the banking sector, Sitharaman said she will work towards bringing the institution into reality in the next financial year. The finance minister said that large part of the functioning of the ARC will be handled by the banks with support from the government.