New Delhi: Union Finance Minister Nirmala Sitharaman on Monday said the government has been very transparent in setting the new fiscal deficit target, which has been pegged at 3.5 per cent for the next financial year beginning April 1.
"There are a lot of speculations regarding the fiscal deficit. Earlier, there was a situation in the previous regime where fiscal deficit numbers were fudged. We are not going to fudge the data," she said while speaking at an event held at FICCI here.
"We are putting money for public asset creation, connectivity to particular districts, which do not have basic infrastructure. We are very transparent in setting the new fiscal deficit target," added Sitharaman.
"We expect the industry to move the economy forward. The government is there to support the industry. We are putting money where assets have to be created. We have given the roadmap. The Budget is not sector-specific. The attempt is to take a prudent route to achieve the targets set," she added.
She further said that many people have been speculating that the fiscal deficit would cross 4 per cent. "We may have a situation wherein you want the government to spend on pump-priming the economy," she said.
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On being asked why was the Sensex not happy on the Budget day, Sitharaman said: "But I see them being happy today. Monday is the true working mood, and today's mood is that they are happy. Aren't they? Not exuberant but happy somewhat."
The fiscal deficit target for the next financial year beginning April 1 has been pegged at 3.5 per cent, down from 3.8 per cent in the current fiscal of 2019-20.
This is consistent with the government's abiding commitment to macroeconomic stability as part of medium-term fiscal policy cum strategy statement 2020-21, Finance Minister Nirmala Sitharaman had said on Saturday.
Besides, it demonstrates the government's clear intent of achieving fiscal targets and affirming commitment towards prudent fiscal management and boosting investments, she said while presenting the Union Budget 2020-21 in Parliament.
"Section 4(2) of the Fiscal Responsibility and Budget Management Act (FRBM) 2003 provides for a trigger mechanism for a deviation from the estimated fiscal deficit on account of structural reforms in the economy with unanticipated fiscal implications," Sitharaman had said.
"Therefore, I have taken a deviation of 0.5 per cent, consistent with Section 4(3) of the FRBM Act both for revised estimate 2019-20 and Budget estimate 2020-21," she added.
Disinvestment proceeds to be used for creating infra for country
Sitharaman also said the money raised through disinvestment will be used to develop infrastructure, which will have multiplier effect on the economy and not bridging revenue deficit.
The government set an ambitious disinvestment target of Rs 2.10 lakh crore for the next financial year, which includes selling stake in BPCL and insurance behemoth Life Insurance Corporation of India (LIC).
"We are showing clearly where each monies being raised will go. So, it's not being raised to fill certain hole in the Consolidated Fund of India. The money being raised from disinvestment will go towards infrastructure.
"We are showing the direction. We are telling you where the money is going to be spent so that you can plan your investments and your investments and your expansion well in alignment with what government does... you will facilitate the government and we will equally facilitate the private sector," she said.
She said when the government puts money infrastructure, it has cascading effect and give rise to economic activity.
(From Agencies)
