Maintaining growth momentum the main idea behind Budget preparation: FM

Sitharaman said she was clear that the Budget had to keep the growth momentum intact, and even Prime Minister Narendra Modi was on board with it

Finance minister Nirmala Sitharaman has said that the main idea behind preparing this year's Budget was to maintain the growth momentum but appeared to accept that the private sector was waiting to see how the technology disruption underway will play out in the immediate future.

In an interview with The Indian Express, a day after presenting her fifth Budget, Sitharaman said the transition happening right now is "unlike any previous decade," and it will have an impact for the next 100 years. So the private sector is trying to invest in things that take them that far, she said.

"To be fair to them, I think it's (their) transition not just to invest more, it's also a transition to investing like how more? Is it going to be with more technology, or is it going to be with industry 4.0, how much of the investment is going to come in through robotics or AI? So even they (industry CEOs) are moving into areas which are not so familiar for them," Sitharaman said.

She identified skilled manpower as one of the challenging areas. She said the industry is seeking skilled manpower to keep pace with the technology but not finding enough capable hands. "That is why you find that in the Budget, we have placed a lot of Industry 4.0-related training and skilling."

Sitharaman said that the twin balance sheet problem of the private sector had been addressed. "Their books of accounts are far more cleaner, neater now. Also with the PLI, China plus one, Europe plus one, etc., the private sector is now seeing the virtue of moving fast on this track," she added.

The Budget has received a positive response from analysts, most of whom praised the finance minister for exercising financial prudence a year before the general election. They have pointed out the steep increase (33 per cent) in the proposed capital expenditure for this financial year to Rs 10 trillion.

Asked what she was thinking before the Budget preparation, she said during the interview that she was clear that the Budget had to keep the growth momentum intact, and even PM Narendra Modi was on board with it. "He said growth ka momentum rakhna chahiye (we need to keep the growth momentum)."

Asked about persistent inflation, she said the economy's issues with inflation are cyclical, but India has been hit by high food, high fuel, and high fertiliser prices simultaneously this time, particularly when coming out of Covid.

During the interview, she was also asked about the nudge to taxpayers to move to the new tax regime. She said the government wants people to move to a simpler regime and is working to make it more attractive. She said she expects 50-55 per cent of people to shift to the new tax regime.

The finance minister, who is a part of the Cabinet Committee on Security, also spoke on the raging conflict in Europe and the challenges arising from a developing China-Russia axis.

"To be fair, India, I think, has never had the advantage of just looking at its interests, forgetting its neighbourhood. India has never had the opportunity. It has never had the luck," she said. However, she added that India's voice is now heard better, and its position is also appreciated better.