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Public spending for infrastructure to boost growth, put more money in people’s hands: Nirmala Sitharaman

India still is the fastest-growing economy globally. I would rather do everything that it takes to make sure that growth is sustained at that or even higher level, the FM said.

Jul 06, 2019, 07.21 AM IST
Sitharaman said, "will ensure that fiscal deficit follows the glide path."
Finance minister Nirmala Sitharaman spoke to Swaminathan Aiyar and Nayantara Rai of ET Now. Edited excerpts:

Instead of borrowing domestically and raising interest rates, you are going to be borrowing abroad. Could you tell us how much are you going to borrow this year, how much in the next five years?
A bit too early for me to get into the details of how much… We thought we can make a genuinely good attempt at tapping these resources... our external borrowing is rather minuscule so we wanted to make the two things come together so that the country can benefit.

Rs 70,000 crore of bank capitalisation will help banks revive lending. What is the phasing?
I would think it will be about three years but I would not be able to break it down now. You will get to know a bit later, during the parliamentary debates. I will be able to give you the figure for it. And similarly, we have also attended to the NBFC crisis.

It is part of the same package?
Yes, same thing… It is an issue of solvency for some, it is governance for some of the NBFCs, a third may suffer from the want of liquidity. We looked at what were the immediate things we had to do. One was for clearly making sure that the regulatory and resolutionary powers were in the right place. And that is the reason why in this finance bill we are moving it all to RBI and that is true of even the National Housing Bank-related powers. Similarly, we have given a window which can be opened by the RBI for which we are giving a 10% backstop arrangement. I hope those suffering for want of liquidity will be able to get it but for those who are not suffering from liquidity (squeeze) there is a positive message going that on that sector we have responded.

Have you included an assumption of RBI excess capital in the budget?
The finance secretary during the press conference said Rs 90,000 crore, so it must be in that range.

Do you think you have done enough to spur investments and growth?
India still is the fastest-growing economy globally. I would rather do everything that it takes to make sure that growth is sustained at that or even higher level… The way in which we have approached the spurring of the growth matter is we are going to put more money in the hands of the people through the time-tested method which we have done in the last five years of investing and public spending for infrastructure. On the other (hand), through direct benefit transfer we are definitely moving to literally putting money in the hands of the last man in the queue.

The fiscal deficit target has been narrowed.
I am here to have complete compliance of the law. FRBM is a law, so I will obey it and the glide path is sacred for me. I have made sure that the fiscal deficit will go through the glide path and today we are at 3.3%.

Which companies will be divested? Air India’s not part of the Rs 1.05-lakh crore divestment target?
We will make sure that everything which has been given the CCEA approval (is divested)… Air India was separate.

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