Elections come and go, but economy requires strong support at this juncture: FM Nirmala Sitharaman

Finance Minister NIrmala Sitharaman

Finance Minister Nirmala Sitharaman said on February 2 that the consideration of upcoming elections in five states was not on her mind while framing Budget 2022-23.

In an exclusive conversation with Network18 Editor-in-Chief Rahul Joshi, the finance minister said while elections come and go, economy required a strong support at this juncture when it was coming out of pandemic and showing very good positive revival signs.

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"I think in the mind of the Prime Minister there was never this doubt that this budget, drawing from certain policy prescriptions that we had laid out in the last budget. For an economy which is coming out of the pandemic and showing very good positive revival signs, we should unhesitatingly give more help and stimulus that is required so that the revival is sustainable and strong," Sitharaman said.

The Budget 2022-23 tabled by Sitharaman on February 1 did not have any special announcements or schemes for five states going to the assembly polls in less than two weeks. This was in contrast to last year’s budget in which the finance minister made substantial allocations for four states going to polls soon after she tabled the budget in the Parliament.

The voting for the five states, including the country’s most populous state of Uttar Pradesh, will be held in seven phases between February 10 and March 7 . The counting of votes in all the five states will be done on March 10. Together these states account for 145 members of Parliament—102 of the Lok Sabha and 43 the Rajya Sabha.

READ: Ahead of Crucial UP Polls, Why Modi Govt Did Not Go for Populist Measures in Budget 2022

The finance minister elaborated that, this year too, the government wanted to continue the momentum and also do as much as required to help states to  move forward with their infrastructure spending.  "So from the beginning, I think the clarity in the mind of the PM was that growth has to be ensured and sustained because only by public expenditure on infrastructure building," she said, adding that the government believed that  the virtuous cycle will happen and there will be a crowding in effect for the private investment to come.

"So there was never a doubt other than this," she said.

To the question on whether elections were weighing on her mind while framing the budget, the Finance Minister said, “No. Actually we thought of the economy does well and if growth has attained that kind of a momentum, the multiplier affect."

She explained that when you spend on infrastructure and when you do capital expenditure, for every rupee you spent, you get approximately Rs 2.95 as a multiplier affect as opposed less than one rupee that you get for every rupee spent when you give money through revenue expenditure.

"Therefore, we thought it was important to have maximum multiplier effect and that would have enough ripple in the economy, thereby the well-being of citizens will be attended to. So, if that is happening, why would any other consideration come in, even with the elections on," the FM said.

"Elections come and go, but the economy, particularly at this juncture, requires that strong support," she said.