"Unabashedly Growth-Oriented Budget," Explains Principal Economic Advisor Sanjeev Sanyal

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After Finance Minister Nirmala Sitharaman presented the Union Budget 2021 in Parliament, Principal Economic Adviser in Finance Ministry Sanjeev Sanyal spoke with Republic TV and contended that the Union Budget 2021 is "unabashedly a growth-oriented budget".

Speaking with Editor-in-Chief Arnab Goswami, Sanyal explained the rationale behind the mini budgets that were introduced in the year 2020 when the country was grappling with pandemic and how the mini budgets have made way for the massive Union Budget 2021.

When asked by Arnab Goswami on how he perceived this budget, he said, "There was a lot of criticism last year that India didn't go for the big bang stimulus upfront in the middle of the lockdown. But as we explained in the economic survey, there was no point in pressing the accelerator when you got the foot on the brake. Since then we have been taking the foot off the brake and we did a sequence of mini budgets to get the momentum going, and the idea here is to provide the roadmap that look we here in India are going to spend whatever it takes to get growth going again. This is an unabashedly growth-oriented budget.

The Principal Advisor stressed on the fact that the Union budget has focussed on infrastructure development as he explained that spending on infrastructure will help in creating the assets for the future. He asserted that spending money on infrastructure will have a multiplier effect in terms of employment generation and creating demands.

"We are going to spend money. We are not going to waste it on just about anything, instead, we focus on building infrastructure, for two reasons - First, by spending on the infrastructure we are creating assets for the future, of course, we will run up debts when we spend like this but those will be to create assets. Secondly, infrastructure spending has the biggest multiplier in terms of creating jobs, in creating demand in second-round effects," Sanyal said.

Infrastructure spending can be seen as a commitment of several years since the spending cannot be done within a year and it's a gradual process. Speaking on the same, Sanyal said, "Infrastructure spending happens over several years. We are consequently saying, we will eventually wean off the fiscal stimulus but we are not going to do this just after one year, we are going to do it systematically over a few years. And we do have a fiscal consolidation plan but it's something that happens relatively gradually."

When speaking of the criticisms that may come up considering the risks of the budget with the subsequent increase in the debt pile over infrastructure spending, Sanyal said that the Finance Ministry has still played conservatively keeping in mind the risks that come along with such kind of spendings. He said the GDP projected by the economic survey, which he co-authored, is 11% which is a conservative number as against the International Monetary Fund (IMF) which has given higher growth forecast for India.
"The economic survey speaks of 11% GDP growth with an upside while it additionally talks about inflation-adjusted nominal growth rate of over 15%. It is perhaps conservative. Even the IMF has a higher GDP growth forecast than ours, but the finance ministry for budgeting purposes has used the number which is more conservative. I am confident that we will do better but its always good to under-promise and over-deliver. So we have been very conservative and very transparent."

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