Union Budget 2017-18: Strong on reforms; will boost rural sector, says Shaktikanta Das

Economic Affairs Secretary Shaktikanta Das on Wednesday lauded Finance Minister Arun Jaitley’s Budget for 2017-18, saying it was strong on reforms, fiscal numbers and macroeconomic parameters.

Speaking to CNBC-TV18, Das said the minister’s pledge to the keep the fiscal deficit — a measure of how much a government borrows to meet its expenses — at 3.2 percent of GDP in 2017-18, from 3 percent in 2016-17, was good news. Das also said net market borrowing had reduced and the government was not sucking out liquidity from the markets.Das lauded proposed reforms in the agriculture sector such as a model law on contract farming, and delisting perishables from APMCs. He said the Budget would give a major push to the rural sector and agriculture sector, resulting in demand creation, apart from attracting major public investment.

In the financial sector, he praised the move to do away with Foreign Investment Promotion Board, which has been in existence for more than two years, and also appreciated proposals to set up an oil major and list railways PSUs like IRCTC.Below is the verbatim transcript of Shaktikanta Das' interview to Timsy Jaipuria on CNBC-TV18.Q: Your views on the Budget?A: The Budget is strong on the fiscal numbers. It is strong with regards to the overall macroeconomic parameters. It is strong with regard to reforms. However, with regard to the fiscal it is strong because the finance minister has maintained the fiscal deficit at 3.2 percent in line with NK Singh Committee report. The committee says that 3 percent should be the fiscal deficit for next three years. The finance minister has said that next year that is in \\'17-18 the fiscal deficit will be 3.2 percent with a commitment that in the following year the government will reach 3 percent.The net market borrowing also has been reduced. It is 348,000 crore after taking into account the redemptions and the buyback of securities which the government will undertake. Therefore, we are not sucking out that much of liquidity from the market. It is also strong with regard to the macroeconomic parameters because the numbers the minister has said so I do not have to repeat that. However, with regard to reforms, look at the agriculture sector for example, in agriculture sector a model law on contract farming will be prepared and circulated among the state for adoption. Perishables, we are working with states to delist perishables from the agricultural produce market committee (APMC) markets. With regard to the financial sector, the Foreign Investment Promotion Board (FIPB) which has been there for the last 20 years or so, has been abolished and we are moving to more and more liberalisation of the FIPB regime. The finance minister has also announced that there will be oil major which will e setup by amalgamation of some oil public sector undertaking (PSUs).Listing of railway, public sector undertakings like Indian Railway Finance Corporation (IRFC), Indian Railway Catering and Tourism Corporation (IRCTC) will be done. So a large number of reform measures also have been announced and they are in various parts of the Budget speech. Therefore, on the whole it is a strong Budget for the rural sector, for the agricultural sector. It will result in demand creation in the rural sector. It will also give a major push to public investment which in turn will have several multipliers effect.