Finance minister Nirmala Sitharaman on Wednesday responded to the controversy about two different figures used in the Budget 2019-20 and in the Economic Survey. 

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Responding to the controversy over 'discrepancy' in the GDP figures, Sitharaman, while replying to the Budget debate in Lok Sabha, said that every number is authentic.

“Both the projections (used in Budget and Economic Survey) are consistent with each other, as each one of them projects the nominal Gross Domestic Product (GDP) of Rs 211.60 lakh crore for 2019-2020.”

Defending the Budget, the finance minister said the government used the same GDP base in this Budget as was used in interim Budget instead of updated figures used in the Economic Survey. “It was to maintain consistency and ensure comparability between the two Budgets,” she said.

“The consistency with which the government's Budget document is produced whether it is interim or regular is different from what is used in the Economic Survey….Economic Survey is produced by the Chief Economic Advisor and the government holds a respectful arm's distance from the Economic Survey,” she said.

“The lower GDP base of 2018-19 has been used in the Budget documents and the same GDP base was used in the interim Budget of 2019-20. Using the same GDP base ensures comparability -between regular Budgets as well as interim and regular Budget,” she said.

The growth rate of nominal GDP for 2019-20 in the Budget has been projected at 12% over the advance nominal GDP estimates of 2018-19 that were released on January 7. The growth rate of nominal GDP for 2019-20 in Economic Survey has been projected at 11% over the provisional nominal GDP estimates of 2018-19 released on May 31.

Sitharaman rejected the allegations about 'unrealistically high' revenue estimates for the current fiscal saying that the projections are realistic, as both expenditure and income receipts have improved.

“The gross tax receipts are budgeted at Rs 24.64 lakh crore in the Budget estimates (BE) 2019-20 which is an increase of Rs 2.13 lakh crore or 9.48% over 2018-19 revised estimates (RE),” she said. Centre's net tax revenue after transfer of states' share and transfer to National Disaster Response Fund (NDRF) is Rs 16.49 lakh crore, an increase of Rs 1.65 lakh crore or 11.13% over RE of 2018-19. 

Similarly, total expenditure is placed at Rs 27.86 lakh crore for 2019-20, showing an increase of Rs 3.44 lakh crore over the BE of 2018-19 and an increase of Rs 3.29 lakh crore over RE of 2018-19. 

“Under the centrally-sponsored schemes the amount which is being spent is far higher than it was earlier. The Budget reflects the commitment to substantially boost investment in agriculture and social sector, particularly in education and health,” she said. 

By keeping the fiscal deficit at 3.3% of the GDP against 3.4% which was envisaged in the interim Budget in the BE 2019-20, the government has shown commitment to continue on the path of fiscal consolidation without compromising on the requirement of public expenditure placed by the various sectors, she said.

Responding to the criticism over 'inadequate fund allocation' for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA) and Pradhan Mantri Awas Yojana (PMAY), Sitharaman said that the allocations have been kept mostly at the level of interim Budget. “MNREGA is a demand-based scheme. The funds can be augmented later at the stage of RE,” she said.

Talking about the government's agenda to make India a $5 trillion economy by 2024-25, she said, “To achieve the target of $5 trillion economy, we spoke of effectively bringing investment into the economy for generating jobs, towards manufacturing in India.” She said the government will make an investment of Rs 100 lakh crore in infrastructure over the next five years. The minister defended the increase in income tax surcharge on the super-rich saying that it was a small contribution towards nation-building. 

Sitharaman said that the government would ask the Goods and Services Tax (GST) Council to reduce the tax rate on electric vehicles from 12% to 5%. The government will give an additional tax benefit of Rs 1.5 lakh on the interest paid on loans taken for buying the e-vehicles.