Budget an action plan for growth, FM tells envoys
NEW DELHI: The Union Budget 2020-21 is focused on a futuristic vision, an action plan for growth, and measures to boost income, investment and demand, finance minister Nirmala Sitharaman told ambassadors, high commissioners and diplomatic officials of about 60 countries on Thursday.
The finance minister’s opening remarks focused on the key considerations behind the latest budget and its highlights, people familiar with the discussions said, requesting anonymity. The breakfast meeting was organised by India Foundation, an independent research centre focussed on the issues, challenges and opportunities of the Indian polity.
Among the key considerations of the budget were maintaining macro-economic stability, addressing concerns regarding lack of liquidity, and the government’s resolve to abide by the Fiscal Responsibility and Budget Management (FRBM) Act, they said.
While presenting the budget on February 1, the finance minister estimated a fiscal deficit of 3.8% of the gross domestic product (GDP) in revised estimate for 2019-20 and 3.5% in the budget estimate for 2020-21, which she said was “consistent with government’s abiding commitment to macroeconomic stability”.
According to the officials cited above, Sitharaman explained diplomats that a minor deviation from the glide path is consistent with the FRBM Act. While initial fiscal deficit glide path for 2019-20 was 3.3% of GDP and 3% for 2020-21, the Act provides for a trigger mechanism for a deviation on account of structural reforms in the economy with unanticipated fiscal implications, she said. The government, therefore, a deviation of 0.5% for both, RE 2019-20 and BE 2020-21, she added.
Among the envoys who attended the interaction were US ambassador Kenneth Juster, Israeli envoy Ron Malka, Russian ambassador Nikolay Kudashev, European Union envoy Ugo Astuto and UK acting high commissioner Jan Thompson. Most of the other diplomats were at the deputy ambassador rank and below.
Among the highlights of the minister’s remarks were infrastructure and rural development. The envoys and diplomats raised a number of questions on the recent increase in import duties, which the minister responded to, people mentioned above said.
According to her, the government consciously raised import duty on finished goods to give a chance to millions of its small and medium enterprises to flourish and create employment, the people said. Customs duties on raw materials have been reduced to encourage value addition in India and she urged foreign investors to set up manufacturing facilities in India and also avail such benefits, they added.