The government has decided to spend big on infrastructure across a wide variety of sectors to give a greater impetus to the economy which is recovering from the impact of Covid-19, Finance Minister Nirmala Sitharaman said on Monday.
Addressing the post-budget press conference, the minister said the government has been absolutely upfront with the fiscal deficit which has been pegged at 9.5 per cent of the GDP and so "we have spent, we have spent and we have spent".
The minister said big spending on infrastructure would help give the needed demand push to the economy.
Sitharaman, who was wearing a red-colour sari with off-white detailing and gold border when she presented the budget in the morning, wore a yellow and golden-colour sari during the press conference.
"Budget 2021 comes at a time when all of us desire to give greater impetus to the economy, we thought this impetus would be qualitatively spent well and would give the needed demand push if we spend big on infrastructure," she said.
The minister said there were two important features of the budget, including the steep increase in budget outlay in the health sector.
"One we chose to spend big on infrastructure which pans across roads bridges, ports, power generation and so on. The second feature was that we attend to the need of the health sector," she said.
She said the government has attended to the needs of the health sector, capacity building in health has been given a big place with focus down to the planning of block-level requirements.
She said agriculture has been given emphasis and allocation for credit flow through NABARD has been increased.
"We are bringing in an Agriculture Infrastructure Development Cess through restructuring without consumers having to pay more. In no category has the consumer ended up paying more after this cess. That we have done only because we wanted to be sure that in order to improve agricultural infrastructure, we have a dedicated amount coming out of the budget rather than that going it to the consolidated fund. It might still go but we know what is going to be used for agriculture infrastructure," Sitharaman stated.
The minister emphasised that the budget has introduced various reforms in the financial sector including the IPO of LIC and an increase in FDI in the insurance sector.
"We have come up with a formulation to clean up NPAs in banks. A Development Financial Institution is being brought in to fund infrastructure requirements. This DFI will be used to raise about Rs 5 lakh crore in the next 3-5 years. We also see a future for private sector DFIs," she said.
Sitharaman said the government has made government accounts more transparent, and is absolutely upfront with the fiscal deficit.
"We ensured repeated review of capital expenditure and ensured that spending was encouraged and not delayed. Our fiscal deficit which started at 3.5 per cent during February 2020 has increased to 9.5 per cent of GDP, so we have spent, we have spent and we have spent. At the same time, we have given a clear glide path for deficit management. We have made brave decisions to keep government accounts open and transparent," she said
The finance minister added that the provision for extra-budgetary resources in Budget 2021 is zero, and for unidentified contingency it is Rs 30,000 crore.
