Govt Has Largely Kept Vote On Account As It Should Be, Says FM Nirmala Sitharaman On Interim Budget 2024

Finance Minister Nirmala Sitharaman on Thursday said the government has largely kept the vote on account as a vote on account, and the Interim Budget 2024-25 has laid out a plan for the sectors that we will focus on in the July Budget. She said India has a better-managed economy with the right intent and policies.

Addressing the media post the presentation of the Interim Budget 2024-25, Finance Minister Nirmala Sitharaman said, “This is an Interim Budget presented just before elections. I want to draw attention to GDP — governance, development and performance. I would like to outline what we have achieved in all these three.”

She also said India has seen three consecutive years of 7 per cent growth. She highlighted the government’s performance over the last 10 years. “We have a better-managed economy with the right intent and policies,” she added.

Sitharaman said the government has brought down the fiscal deficit in spite of challenging times with prudence and transparency. Inflation management, handling the economic fallout of COVID-19, using DPI for growth of the economy and cleaning up the banking system showcases the government’s performance, she added.

The fiscal deficit target of 5.1 per cent of GDP for 2024-25 clearly indicates that we are on well on track to meet or be below 4.5 per cent by 2025-26, Sitharaman said.

The finance minister stressed on five disha nirdashak baatein (path-showing points) — 1. Social justice as effective governance model, 2. Focus on poor, youth, women, and the Annadata (farmers), 3. Focus on infrastructure, 4. Use of technology to improve productivity, 5. High power committee for challenges arising from demographic challenges.

She said Bihar, Jharkhand, Odisha, West Bengal, Chhattisgarh and West Bengal will be the engines of growth.

She also said the government will issue a white paper on economic performance of the last 10 years versus the 10 years prior to that. She also referred to as the period of next 25 years, dubbed as Amrit Kaal by the government, as “Kartavyakaal”.

In response to a media query, Sitharaman said Budget Estimates are always realistic with us. “This is our realistic and slightly conservative estimates.”

On capex, the finance minister said it is an 11 per cent growth on capex on a high base. “And, we can see signs of private sector also coming in.”

Meanwhile, on the tax-GDP ratio, Finance Secretary T V Somanathan said the target to reduce the Centre’s debt-to-GDP ratio to 40 per cent was set before the COVID-19 period. The relevance of the target now has to be examined, he added. The target to reduce the Centre’s debt-to-GDP ratio to 40 per cent is a historical relic, he further noted.

On Disinvestment, Disinvestment Secretary Tuhin Kanta Pandey said we don’t have a fixed target for FY25. That’s why we have kept a ‘other receipts’ head. If we get an opportunity, we can even exceed that.

“Working on the contours of the urban housing scheme. For now we have given a token amount and we will decide on the funding of the scheme once contours are ready,”Finance Secretary TV Somanathan said, in response to a media query.

Sitharaman said every ratings agency should take on board that we have not only cut fiscal deficit but have also bettered fiscal consolidation. A simple straightforward message for every ratings agency is that we not only aligning with the fiscal consolidation roadmap we had given earlier but are even bettering it, she added.

There will be no extension of lower tax rate to new manufacturing units that come into place after March 2024, Sitharaman clarified during the post-Budget press briefing.