The Union Budget for 2016-17 will primarily focus on stimulating growth without deviating too much from the fiscal deficit target set by the Finance Minister Arun Jaitley in his previous Budget, Economic Affairs Secretary Shaktikanta Das indicated on Monday.
Mr. Jaitley had set a fiscal deficit target of 3.9 per cent of GDP for 2015-16, paring it further to 3.5 per cent for 2016-17 and 3 per cent for 2017-18. However, with the economic recovery still tentative and private sector investments remaining elusive, there has been a growing clamour for the government to relax its deficit targets in order to pump prime the economy via enhanced public investments.
The economic affairs secretary emphasised that the global economy and market movements are far more unpredictable today than ever before, yet India’s growth is healthy.
For budget, the govt. invited suggestions from citizens through Twitter for the first time.
“Unexpectedly, markets are crashing, currencies are depreciating. Whatever happens in the rest of the world affects us because India is getting increasingly globalised. I think amidst all these problems, when we are in a turbulent sea, India is staying afloat and not just that… this year… we are expecting a growth of 7.6 per cent which can be considered as very good, given the circumstances,” he stressed.
“The government is committed to see that we not only continue this growth but increase it,” Mr. Das said. “There are people who say we should not be worried about borrowing and that spending is where the focus should be. The other school of thought is that we must hold the fiscal deficit tightly because our repayment capability will be otherwise affected. The reality is somewhere in the middle,” he said.
“Given the fiscal constraints, it is the government’s endeavour to present a budget which is growth oriented and maintains the momentum of growth and tries to develop on it,” Mr. Das said during an interview on the Finance Ministry’s YouTube channel. He also said that growth was the key for job creation and economic development.
“The world economy today is experiencing volatility and uncertainty which we never saw earlier. There was a time when we used to say that we didn’t know what was going to happen next week in Europe. But today, we have come to a position where we don’t know what’s going to happen the next day in any part of the world,” he said.
For Budget 2016-17, the government invited suggestions from citizens through Twitter for the first time, even conducting a series of polls to gauge public priorities and expectations from the budget.
“Usually, around 50-60 per cent of the proposals are repeated every year. We analyse these as well because the situation is always changing. Just because we couldn’t take it last time doesn’t mean we won’t look at it this time,” Mr. Das said.
Some of the new suggestions are administrative in nature and can be examined at any point in the year. “So, we take out what really relates to the budget process and then we have dedicated teams for examining these proposals,” the secretary said.