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Informist, Friday, Oct. 4, 2024

 

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--Sitharaman:Coming decades to see steepest rise in people's quality of life 
--CONTEXT: Finance Minister Sitharaman speaking at Kautilya Econ Conclave 
--Sitharaman: India's econ rise in coming decades to be unique in a few ways 
--Sitharaman: India must develop domestic capacity to grow sustainably 
--Sitharaman: Consumption to organically rise domestically in coming years 
--Sitharaman: Rising middle class will boost consumption in the next decade 
--Sitharaman: India benefits from reshaping global order 
--Sitharaman: Continue to stay committed to reducing fiscal gap 
--Sitharaman:India fincl system nimble to growing needs of developing India 
--Sitharaman: Govt's fiscal tools to drive out poverty 
--Sitharaman: Fiscal consolidation to keep bond yields, borrow cost in check 
--Sitharaman: Decline in commodity prices aided subsidy cut
--Sitharaman: Investment reform a focus for this govt 
--Sitharaman: Pursuing trade pacts with cluster regions to boost exports

 

NEW DELHI – The government is committed to lowering the fiscal deficit, which will not only keep bond yields in check but will also bring down borrowing costs across the economy, Finance Minister Nirmala Sitharaman said Friday. The government aims to lower the fiscal deficit to 4.9% in 2024-25 (Apr-Mar) from 5.6% in FY24.

 

Buoyant revenue generation, restrained revenue expenditure growth, and healthy economic activity will help the government bring down the fiscal deficit in FY25, Sitharaman said at the Kautilya Economic Conclave here.

 

Along with fiscal consolidation, the government also continues to improve the quality of expenditure, the finance minister said. The government's capital expenditure is budgeted to rise 17.1% on year to INR 11.1 trillion in FY25, which amounts to 3.4% of GDP.

 

"Additionally, a larger proportion of fiscal deficit is now accounted for by capital outlays, indicating an increasingly investment-oriented deficit financing," Sitharaman said. A decline in commodity prices has also allowed the government to lower the budgeted allocation for subsidies on fertiliser and fuel, she said. "This has contributed to restraining the growth in revenue expenditure, which is estimated to increase by 6.2% on year in FY25."

 

The finance minister said that the government's fiscal tools will drive out poverty from India, and the coming decades will see the steepest rise in people's quality of life. India's economic rise in the decades ahead will also be unique in a few ways as the country will continue to grow when the global backdrop is not favourable to trade and investment, Sitharaman said.

 

Even as global order is re-positioning right now, India stands to benefit by creating robust supply chains with countries with strategic congruence, Sitharaman said. India is already pursuing trade pacts with cluster regions to boost exports, she said. "India benefits from the new international order, which is reshaping better to reflect the power distribution of today’s world." 
 

In order to grow sustainably, India must develop domestic capacity, Sitharaman said. The country's young population will be the key factor that will shape India's growth story, she said. 

 

Additionally, India's growth story will be supported by domestic consumption demand, which will rise organically in the coming years, the finance minister said. "The rising middle class will boost consumption in the next decade."
 

On the government's part, investment reforms and ease of doing business are central to its policy of minimum government and maximum governance, Sitharaman said. "The government has pursued a multipronged policy of deregulation to reduce investment costs and improve efficiency," she said.  End

 

Reported by Priyasmita Dutta

Written by Shubham Rana

Edited by Tanima Banerjee

 

 

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