Finance Minister Nirmala Sitharaman on Tuesday said the Budget for the next fiscal will attract private investment and ensure a predictable economic recovery in the years to come.
Replying to a debate on appropriation and finance bills in the Rajya Sabha, she defended the handling of inflation but acknowledged the ongoing war in Ukraine has posed fresh challenges, including higher oil prices and disruptions in supply chains.
The Upper House later returned the two bills without any changes, other than those proposed by the Government, completing the nearly two-month-long Parliamentary process for approval of the Union Budget for the fiscal beginning April 1.
The Finance Minister further said in spite of all the uncertainty and all the “self-doubting” eminent persons, who have been doubting the strength of the Indian economy, the FDI inflow into India in 2020-21 was $81.72 billion and $74.39 billion in 2019-20.
She said India has continued to remain in the top five FDI recipient countries as per a UNCTAD report.
The Minister said that in the seven years and nine months of Prime Minister Modi’s Government till December 2021, the FDI inflows have been USD 500.5 billion and that is about 65 per cent higher than the FDI inflows during the entire 10-year regime of the UPA.
She also spoke about steps that are aimed at making life easier for the middle class, related to the Pradhanmantri Garib Kalyan Yojana, statutory PF contribution, and construction of housing units, among others.
“...Newer challenges are before us, (in the) Budget presentation I had not taken into account the Omicron and now we are also facing the situation of a full-blown war in Ukraine which is not some war in some corner of the world. But it seems to be having an impact on all countries like the way the pandemic had,” the Minister said.
She said the war has affected the value chains, and the world markets are caught up in a situation where nothing is normal. The Minister said that while 32 countries (as per an OECD report) resorted to taxation to revive their economies, the Modi-led government did not increase taxes.
“So you are in a situation where like during the pandemic we came up with a Budget and then came the second wave. This time we came up with budget continuity aimed at recovery...And then Omicron and now we also have a war whose impact has been felt by all of us,” she said.
Sitharaman said the Government did not resort to taxation for resource mobilisation to deal with the impact of the Covid pandemic. She further said the Prime Minister had directed that the Budget should not draw on resources by taxing people at this time when recovery is the most important element and that “we should find resources and fully continue with the predictable recovery that we were aiming at”.
Referring to issues concerning private investment, Sitharaman said following the pandemic, the Government had stepped up the investment with a view to creating an environment to revive and sustain the economy.
The Government is conscious of the need to balance the growth and also make sure India’s recovery post-Covid is sustainable, she said and added the budget reflects this commitment and outlines the way forward.
During the discussion, several members had raised concerns over the price situation in the country to which the minister said the government was conscious of inflation.