Govt pitches $5 trillion dream after budget

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Union Finance Minister Nirmala Sitharaman speaks in Rajya Sabha during a Budget session of Parliament, in New Delhi on Friday. (ANI Photo/RSTV)

Union budget 2021-22 shows hope to build a new India and will lead the nation on the path of becoming an economic and manufacturing powerhouse: Anurag Thakur  

Our Bureau
New Delhi 

The reform measures announced in budget 2021-22 will play a big role in India becoming a $5 trillion economy and beyond, chief economic adviser K V Subramanian said on Friday. He also said the country’s economy is expected to grow at 15.5 per cent in nominal terms in 2021-22 and contract 1-2 per cent depending on what the inflation actually might be for the year ending March 2021. “The budget 2021-22 has laid the foundation for the $5-trillion economy… It (reform measures announced in the budget) will play a big role in India achieving the $5 trillion economy target and beyond,” he said at a virtual event.

In 2019, Prime Minister Narendra Modi envisioned making India a $5 trillion economy and a global economic powerhouse by 2024-25. Noting that India’s potential rate of growth is 6.5-7.5 per cent, Subramanian said the country must continue to focus on growth. The CEA said the IMF has projected the country’s economic growth even higher than the Economic Survey’s growth projection at 11.5 per cent and this is all on real terms. “So, if we include about 4 per cent inflation, then 15.5 per cent GDP growth can be expected in the nominal term for the coming year (2021-22).

“This year, I think it (GDP growth) might be around (-) 1 to 2 per cent depending on what the inflation actually might be for the year ending March of this year,” he said.

Subramanian pointed out that every country in the world is facing lower economic growth because of the Covid-19 pandemic. “But from India’s perspective, in the coming year, whatever growth momentum we have lost, we would recoup that momentum,” he asserted. Replying to a question, the CEA said one public sector insurance company is going to be divested and this company will compete with private sector insurance companies.

He also expressed confidence that the government will achieve next financial’s fiscal deficit target of 6.8 per cent. According to Subramanian, India has faced three crises after 1991 — the Asian crisis (1997), the global financial crisis (2007-08) and the Covid-19 pandemic (2020).

During the global financial crisis, the then Manmohan Singh government increased revenue expenditure and decreased capital expenditure which gave a push to the demand side only and not the supply side, which resulted in high inflation, he said.

Subramanian said Prime Minister Narendra Modi’s statement in the Lok Sabha is a seminal moment in India’s economic history as the PM talked about wealth creation and the salutary role of the private sector.

Also on Friday, Union Minister of State for Finance Anurag Thakur said that the Union budget 2021-22 shows hope to build a new India and will lead the nation on the path of becoming an economic and manufacturing powerhouse. “This Budget shows a hope to build a new India, a stronger India and to build a self-reliant India. It will set us on the path of becoming an economic and manufacturing powerhouse,” Thakur said in Rajya Sabha. Taking a jibe at RJD leader Manoj Jha’s remark “Aam budget ya khass budget’ (Whether the budget is for common people or for important people), Thakur said that the allocation for the benefit for the person with physical disabilities has been increased by 3 percent in the current budget, whereas allocation for the ‘Mission Sakti’ has increased by 16 percent.

In a veiled attack on Rahul Gandhi, Anurag Thakur on Thursday said the Congress leader was “not prepared” to speak on the union budget. “A senior MP was speaking before me, so I thought he must be knowing the rules of this House and that if one issue has already been discussed, it is not discussed again. Secondly, I can understand that he was not prepared for Budget,” Thakur said while participating in the debate on the budget in the Lok Sabha. Gandhi, who also participated in the debate, spoke only on the new farm laws.

Thakur rejected Gandhi’s allegations and said there is no provision of closing mandis in farm laws. “This indicates the depth of their (Congress) knowledge and reading. They do not have the basic information,” he said.

“Some people remain absent from the House as well as the country,” he said.

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