FM's 'Mool Mantra': Can't dodge fiscal deficit, has to be carefully tackled

Union Finance Minister Nirmala Sitharaman speaks during the post-budget press conference, at National Media Centre in New Delhi | Photo: PTI
Finance minister Nirmala Sitharaman on Monday expressed the hope that many private development finance institutions (DFIs) would come up, making the entire process of funding infrastructure competitive. 

"It is not the job of just one DFI, but it is an opportunity for private DFIs to come into play. With many private DFIs competing, the entire process would become competitive," she said in a virtual event, Demystifying Union Budget 2021-22, organised by the PHD Chamber of Commerce and Industry.

Sitharaman mentioned that the government can give stimulus package to revive the economy, however, long-term infrastructure financing is the job of DFI. 

The government will present the "National Bank for Financing infrastructure and Development (NaBFlD) Bill, 2020 in Parliament to set up a government-owned DFI. The Bill will also have provisions for private DFIs. 
The finance minister said the government is also taking steps to carefully monitor the fiscal deficit. She mentioned that the 'Mool Mantra" (key rule) now is that fiscal deficit is something that one cannot escape, but at the same time, it needs to be carefully tackled.

She said that the government has managed to make the Budget transparent. "There is nothing under wraps or swept under the carpet. Whatever the government is borrowing or spending is open for everyone to see," she emphasized.

Sitharaman said the government is governed by the principle of “Minimum Government-Maximum Governance” and presented the same philosophy through the Budget 2021-22 recently. 

She mentioned that the government has spent big on those areas of activity which gives a big multiplier effect.  

The finance minister stated that the multiplier was the key where the money was going. 

While acknowledging that the industry has welcomed the steps, Sitharaman said that the government believes that welfare is when one empowers people.

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