FM Nirmala Sitharaman interview: ‘We didn’t want any populism… knew our track record would explain it’

Two things… our performance in 10 years… 10 years of taking the route of empowering people and not going by entitlement. When houses reach people, electricity reaches people, and you also have money coming through direct benefit transfer, you financially empower them, you also make sure that opportunities are given to them. So the mantras that we used, whether it was ‘sabka saath sabka vikas’, whether you are looking at making sure that you don’t differentiate between beneficiaries on any other score except (that) he deserves this.

There is actual development reaching the ground. There is no appeasement of sorts. There’s no differentiation among people. No caste or religion is brought in. As a result, you will find that in the last 10 years, we have actually laid the foundation for people to now think in terms of meeting their aspirations.

So, the vote on account budget was not seen as an instrument to tell people we can do this or we can do that without having performed in the last 10 years.We didn’t want any populism coming here. We knew that our track record would explain it.

Over the 10 years, you have given out basics… banking, electricity, cooking gas and so on. So, you effectively created 500 million plus new stakeholders in the Indian economy. How do you see this playing out for the economy and society going forward?

That will be the trigger point for any consumption in the future. Consumption not just of basic necessities, not just of food products, but also of services, education. Not as corporate education, but seeking skills, seeking knowledge, seeking opportunity. And it is for that that the Innovation Fund has been set up and a large corpus is being given over five years.

What is the vision behind this?

Economists all over the world agree that if you spend one rupee in capital expenditure, the effect of that will be at least 1 rupee and 45-46 paise.

If you do not do that and spend in revenue, you will not be able to get even 90 paise. Recovery (from Covid) has to be faster, and services should be better, so take the route of capital expenditure. And in the next two years, you will see that recovery has increased and is also sustainable… That is why the importance of capital expenditure is there.

In your Budget, you have not only stayed on the commitment on the fiscal glide, but you have improved on it. Gross borrowings are obviously down, which means RBI gets more room for manoeuvre in its monetary policy.

The emphasis we are laying on being fiscally prudent, without affecting our schemes, without denying funds anywhere, and actually by avoiding wastage. That is why we repeatedly talk about DBT… (Rs) 2.6 lakh crores would have gone waste and no one would have known where it went, because it has gone to unborn children, it’s gone to dead people, to people who don’t exist and so on. So when you brought in technology and synchronised it with biometric validation, you were able to save money.

So your prudence is not in just cutting expenditure, which we have not done in large cases, but in improving revenue and avoiding wastage. Taxpayers’ money has been treated with the due respect that it deserves. And that is why today we have bettered on our fiscal deficit numbers this year and for the next year as well.

You have increased the target of Lakhpati Didis from 2 crore to 3 crore. Is there any timeline for that?

Yes, in 5 years.

On growth trends… in the run-up to the Budget, the RBI first revised it upwards pretty sharply, then the Central Statistical Office came out with an even higher estimate. Are you looking at a new trend rate of growth for the economy as opposed to the previous rates?

It will be too early for me to say that. However, I am seeing that kind of buoyancy…that kind of energy coming out of every sector. Earlier, you would find that if you had a trend coming in the manufacturing (sector), you couldn’t say that of any other sector, certainly not of services. But today, the way the Indian economy is positioned, largely because of the drive that the Indian public is showing, you find every sector is revving to move fast.

We have seen income tax collections exceeding corporate tax collections. Second, when you had put out the earlier estimates, we saw that among the slabs there was a wealth effect which is operational. So is this exactly what you are talking about, that the growing aspirations are now manifesting even in income streams?

Partly, yes. It is also that newer areas of activity, in which earlier people wouldn’t want to tread, are now opening up opportunities. Space is a classic example. India’s space industry has been there for a long time, doing well. It’s not as if they have succeeded only now. But the energy with which it is growing… private participation, contribution of start-ups are giving it a multiplier unlike before. As a result what is happening is that the contribution to the GDP is coming from areas which earlier did not even exist and that is why your GDP’s composition will have to be studied for what it is now…, because areas not recognised until now have suddenly spurred growth and that is contributing.

You have announced Rs 1 lakh crore corpus for research.… People would like to know more about this.

Yes, but I won’t be able to tell you in detail now, because that department will spend a lot of time there. But largely, we are providing money interest-free, and they will get a cheaper corpus. It can be some of the government companies or some special purpose vehicle which will be created for it.

But you have joined it with technology. The people who have joined it with technology will fund it.

Yes, that’s why I believe it is a major step forward. In the next five years, when it will be used for many small and big innovations, it will contribute towards development directly. And when one thing gets the benefit because of innovation, it immediately affects the entire sector.

Like, after bringing Bharat digital payment into the system, you see how much payment is being made from small villages, how much receipts are being made. It is not that money is being received there. But some payment is going for some activity.

You also identified DPI (digital public infrastructure) as a factor of production. Is India now looking to harvest its digital dividends?

India created public infrastructure, made it available to private parties, made it available for small, medium fellows who all want to get onto that and benefit… Those who contribute now, building on the public infrastructure, also stand to benefit because they themselves are taking that produce, which is essentially a public infrastructure foundation. and building on it. That itself is becoming a commodity for transactions.

What is your message for the states?

The government has shown good enthusiasm in this matter. What all? The capital that we are giving to states, 50-year interest free, special assistance, whatever they call it. Whatever is spent through the central department is, at least 30%, investment in states. Today, the states are able to complete their long-term projects quickly. We want to keep that enthusiasm alive.

You talked of social changes, setting up a high-powered committee to look at population growth and demographic changes. What is the thought behind it and is there any timeline?

I’ve said in a different context that there are three Ds about which we are talking: demography, democracy, and diversity. All three are, characteristically, India’s advantage. So now, when this advantage exists for us, are we able to make a long term plan for it? Are we able to really leverage that advantage?… So for this a comprehensive understanding is required. We need to have some group taking all these considerations into their minds and sit and draft up something for the government.

Everyone will have a role to play in Viksit Bharat?

It has everyone’s contribution. Otherwise the 2047 targets will not be reached. Bharat should take everyone along. We are committed to all the programmes for that. This is the ideal of BJP… all the BJP workers know the party should be sarvavyaapi and sarvasparshi.… whatever work we are doing through the government, it should be for overall development. We will work on this ‘mool mantra’.