The government is sticking to the target of becoming a USD 5 trillion economy by 2024-25 and emphasis on infrastructure sector and other initiatives taken in Budget 2021-22 are aimed at achieving the goal, Economic Affairs Secretary Tarun Bajaj has said.
The Budget presented by Finance Minister Nirmala Sitharaman on Monday has given a big push to infrastructure spending, monetisation of assets, ramping up of capacities in healthcare sector and agriculture sector, among others. These initiatives are aimed at reviving the economy ravaged by the COVID-19 pandemic.
“We have not revised the target. We are pushing for it. The various initiatives of the government including emphasis on infrastructure are targeting towards achieving that goal,” Bajaj told PTI in an interview.
The spending on infrastructure has gone up from Rs 4.12 lakh crore to Rs 5.54 lakh crore while on the health sector it has risen to Rs 2.23 lakh crore from Rs 94,000 crore in the Budget Estimate for 2020-21.
Prime Minister Narendra Modi in 2019 envisioned making India a USD 5 trillion economy and a global economic powerhouse by 2024-25. With this, India would become the third largest economy in the world.
Although the Indian economy is estimated to contract by 7.7 per cent during the current fiscal, it is projected to record a growth rate of over 11 per cent in 2021-22.
Last month, the International Monetary Fund (IMF) projected an impressive 11.5 per cent growth rate for India in 2021. This expected growth rate would make the country the only major economy of the world to register a double-digit growth amid the coronavirus pandemic.
China is next with 8.1 per cent growth in 2021 followed by Spain (5.9 per cent) and France (5.5 per cent). With the latest projections, India regains the tag of the fastest developing economies of the world.
On the GDP growth, the Secretary in the Department of Economic Affairs (DEA) said real GDP growth would be 10-10.5 per cent in the next fiscal.
"Our revenue figure is under-stated not overstated. We have taken nominal GDP at 14.4 per cent and revenue growth at 16.7 per cent. So the buoyancy is only 1.16 per cent. We are hopeful we will get more than this. We will definitely be within 6.8 per cent and could be lower also," he said.
Allaying apprehensions on impact of large borrowing on private investment, Bajaj said there is ample liquidity in the market. As a result, the cost of borrowing for the government also declined this year, he added.
There are other alternatives before the government, including the National Social Security Fund (NSSF).
"If private sector needs to come up, we will be happy to create space for them," he said.
The government will borrow Rs 12.05 lakh crore from the market in 2021-22, lower than the Rs 12.80 lakh crore estimated for the current financial year.
According to the Revised Estimate, the gross borrowing for the current financial year was raised to Rs 12.8 lakh crore as against the Budget Estimate of Rs 7.8 lakh crore, an increase of 64 per cent.
"The gross borrowing from the market for the next year would be around Rs 12 lakh crore. We plan to continue with our path of fiscal consolidation, and intend to reach a fiscal deficit level below 4.5 per cent of GDP by 2025-2026 with a fairly steady decline over the period," Sitharaman had said while unveiling Budget 2021-22 in the Lok Sabha on Monday.
Gross borrowing includes repayments of past loans. Repayment for past loans in the next financial year has been pegged at Rs 2.80 lakh crore.