New Delhi: Finance Minister Nirmala Sitharaman on Wednesday said the government is keeping a close watch on inflation to ensure there is no surge in prices, and highlighted the targeted approach in pulling out the economy from pandemic disruptions without slipping into recession.
She also expressed confidence that the fiscal deficit will not breach the target because of enough revenue buoyancy to take care of additional expenditure of Rs 3.25 lakh crore in 2022-23.
The minister was replying in Rajya Sabha to a discussion on first batch of Supplementary Demands for Grants for 2022-23. The supplementary demand for grants was later returned to Lok Sabha, thus authorising the government to spend an additional Rs 3.25 lakh crore over and above the funds approved in the Union Budget.
Sitharaman said the supplementary demands for grants is essentially for meeting expenditure towards food security and fertiliser subsidy, and providing support to the Indian economy.
While participating in the debate, former finance minister and Congress veteran P Chidambaram wanted to know from the government how it plans to fund the additional spending.
"In September itself, government made it clear that we aren't changing our borrowing schedule and borrowing plans... There's enough revenue buoyancy which gives me confidence that we will fund this supplementary demands without breaching fiscal deficit target," Sitharaman said.
The government borrows from the market to bridge the gap between expenditure and revenue. In the Union Budget 2022-23, the government had announced to keep the fiscal deficit at 6.4 per cent of the GDP.
Sitharaman, who is scheduled to present the next Union Budget on February 1, said, "because of the targeted approach in which the government decided to give relief during Covid and address concerns given as inputs from various stakeholders, it has kept India on safe course of revival and also not getting into recession".
Further, she said that some large economies are facing recession because of the approach they had adopted to deal with challenges of the pandemic.
"Borrow and spend and even print money to reboot the economy was the suggestion by a former finance minister and others during Covid. As we close 2022, we should look at the negative effect of use of this suggestion by other countries, which have gone into recession," she said. Referring to the price situation in the country, she said, "we are keeping a good eye on inflation like considerations" which are purely extraneous nowadays, because of the fuel and fertiliser crisis in the international market.