Revenue figures for fiscal year 2017 are credible and reasonable on a Rs 19.78 lakh crore Budget, says Finance Secretary Ratan Watal.
In an interview with CNBC-TV18, Watal said that the government will focus on railways, roads and rural infrastructure in FY17 and plans to work towards the 3.5 percent fiscal deficit target.
Below is the transcript of Ratan Watal’s interview with Sapna Das on CNBC-TV18.
Q: What are your views on public expenditure allocation in this Budget?
A: There has been a discourse, a debate that is it time now to look at other anchors, look at other ways of seeing that how can we handled public expenditure in a more prudential manner, is just an anchor of this fiscal deficit enough or could we look at other things. In deed since the 13th Finance Commission you asked the question about states, it has worked very well. The fiscal management of the state government by and large has shown a lot of improvement.
The Central Government has also shown a lot of improvement in specially its quality of expenditures, the way it has managed itself specially has focused on capital expenditure. As far as this year is concerned or the coming year the financial year is concerned, yes we will stick to the 3.5 target. We have put in a budget size of Rs 19.78 lakh crore out of which Rs 5.50 lakh crore are for plan which is really 15 percent higher than the RE or it’s a big jump over - and the focus is here also going to be on the rural economy, the agricultural sector and specially on infrastructure creation.
It is all good expenditure we are talking about and as far as the committee which you mentioned which will look at this whole thing I mean nothing is pre decided. Yes, it will be perspective it will look at how things have happened in the past and I am sure the committee at an arm’s length of good economist and intellectual they will advise the government on how to handle our expenditures in a better manner.
I had mentioned also around after the Budget speech had been made in the press conference, perhaps a good way at looking at things would be the entire fiscal management at a national level because eventually we get with this 3.5 figure or 4 or 3.9 but eventually it is a country we are a nation, we are an economy. So, we might have to look at the holistically the whole thing. I am not jumping to any conclusion.
Q: But they are almost in sink with the states in the sense we are at 3.5 they are at 3.2-3.5?
A: It will be a consultative exercise where this committee will take us to and I am sure it will come out with good suggestions how to handle public finances better.
Q: It could be possible that instead of a center having a separate target and states having their own targets they would be one national target, there could be?
A: I am not pre-judging that there should be or should not be judging. I am saying that even internally when I have a division call the plan finance one which deals with states whether they are sticking to their FRBM, state has their own fiscal management legislations and how much money they are picking up in the market. Eventually you see the amount of savings that you have in a country or in an economy is limited.
The whole issue is crowding in crowding out how much is appropriated by the public and how much goes into the private sector. That is the balance that we have to maintain. One of the reasons why we have put in more public investment now because there has been a feeling that the private sector has not been able to pick up this money and there has not been enough of investments. However, we are going to take measures which are going to help both sides eventually.
Q: States will also then get some flexibility is that what we understand?
A: They will be part of this engagement with this committee, it is not going to be just some committee which is going to unilaterally decide something and give it to them. I am sure they will have to engage these states which are involved in public spending. Quite frankly there are a few or fair number of states which are the drivers of this growth in this country this whole 7.6 which we keep talking about. Eventually, it also driven by the quality of expenditure of certain states which are growing at their rates of growth.
Q: States like?
A: I don’t want to get into states XYZ, in fact we are looking at this whole concept of champion states and incentivising those states because they can become the drivers of making our gross domestic product (GDP) grow forward. However, having said that it has to be done with a lot of equity. You can’t leave out, we are a family. In a family somebody can be forward looking, you would also have somebody who is not as accomplished as the other person so you have to look after everybody in the family.
(Copy edited by Sidhartha Shukla, interview transcribed by Vrushali Sawant)