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Friday, March 05, 2021

Rather than increased taxes, borrowing to fund Budget stimulus, says Nirmala Sitharaman

The Budget also seeks private sector participation in a big way and provides space to set up of private DFIs, she said at a post-Budget interaction with top CEOs held by the Confederation of Indian Industry (CII).

By: ENS Economic Bureau | New Delhi |
Updated: February 6, 2021 4:24:08 am
The ailing economy needs much more than what Budget 2021 offersFinance Minister Nirmala Sitharaman.

Finance Minister Nirmala Sitharaman said Friday the Budget FY22 provides for enhanced government capital expenditure, especially in infrastructure, health and agriculture sector. The Budget also seeks private sector participation in a big way and provides space to set up of private DFIs, she said at a post-Budget interaction with top CEOs held by the Confederation of Indian Industry (CII).

Though the government will provide some capital for the proposed Development Financial Institution (DFI), the body will also raise capital from the market. In addition, the DFI Bill will provide legislative space for private DFIs.

Similarly, the asset reconstruction company to manage non-performing assets will be floated as a holding company by the banks themselves, with support from the government, she said.

“Contrary to the expectations of a Covid-19 tax, the Government has chosen to fund the Budget stimulus through higher borrowing, rather than increased taxes,” she said, as per a Finance Ministry statement. The spending push will focus on high multiplier areas like infrastructure which would facilitate private investments in power, roads, ports, airports, apart from healthcare and agriculture.

CII president Uday Kotak said the Budget focus on growth and transparency was on right track. Budget proposals also displayed the government approach of encouraging private enterprise and respecting the markets, he said.

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