Next Budget to push infra spending, have vibrancy to ensure economic revival: FM

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday said the upcoming Budget for 2021-22 will sustain the momentum of public spending on infrastructure and have a "vibrancy" to ensure the economic revival continues.

She also said the pace of disinvestment, which has been hit by the COVID-19 pandemic, will pick up in the coming months.

"We shall definitely sustain the momentum of public spending in infrastructure. Because that is the one way we assure that the multipliers will work and the economy's revival will be sustainable....

"I am conscious that the forthcoming Budget will have a vibrancy that is so required for the economy's revival, sustainable revival," she said at the Assocham Foundation Week.

The Budget for the 2021-22 fiscal is expected to be tabled in Parliament on February 1.

With regard to the government's stake sale programme, she said the pace of disinvestment will now gain "lot of momentum" and cases where the companies already have Cabinet approval will be taken up in all earnestness.

"Disinvestment will be happening, corporatisation of banks....they should be able to raise money from the market, even that emphasis is being given," she said, adding the government has taken a lot of steps to deepen and widen the debt market.

The government had pegged disinvestment proceeds in current fiscal at Rs 2.10 lakh crore. So far this fiscal, it has raised Rs 10,500 crore through initial public offerings (IPOs) and offer for sale (OFS).

Further, the strategic sale process of two big companies — BPCL and Air India — is ongoing and the government has received "multiple expressions of interest" for them.

Sitharaman further said government borrowing was pegged at Rs 7 lakh crore in the Budget estimates for 2020-21, but it was later revised upwards to Rs 12 lakh crore.

As of November 20, to ensure that expenditure does not suffer, the government market borrowing has already touched Rs 9.05 lakh crore, which is about 68 per cent more than last year, she pointed out.

"So recognising that this is an unusual year, our borrowings have been kept absolutely at levels so that we can quickly put the money back in projects, in capital expenditure and so on, so that the money goes to the ground. This emphasis that the public infrastructure spending have to be kept up has been fully recognised," she added.

The minister said the emphasis on public expenditure for infrastructure through CPSEs will definitely be kept up and the National Investment and Infrastructure Fund (NIIF) is doing its best to attract funds from abroad. Also, the National Infrastructure Pipeline (NIP) is being given priority, she added.

She also said with the COVID-19 vaccines set to be rolled out, "we can be lot more confident that this pandemic will be behind us and we shall surge forward as an economy."

Earlier on Monday, India Inc had urged Finance Minister Nirmala Sitharaman to take growth-oriented steps, including a fresh fiscal stimulus, in the next budget to maintain the pace of recovery in the economy, which has gone through a rough patch on account of the outbreak of Coronavirus pandemic.

The captains of Indian industry suggested lowering direct tax rates for individuals, more incentives for housing sector and rationalisation of GST structure with a view to boost growth.

The industry chambers also made a case for accelerating infrastructure investment, privatisation of state-owned companies and greater tax incentives for research and development activities.

"The economy is recovering at a quick pace and this momentum needs to be sustained. Quick and timely action by the government has led to this turnaround. Next year's budget must prioritise growth-oriented measures and fiscal considerations should be secondary. The need for further fiscal stimulus remains," said FICCI in its budget recommendations.

Presenting the suggestions, CII President Uday Kotak said, "Government expenditure should be prioritised in three areas - infrastructure, healthcare and sustainability. The budget proposals should also address two critical areas of boosting private investments and providing support for employment generation."

Emphasising on the urgent need for financial sector reforms, Kotak said achieving the vision of India being a USD 5 trillion economy is contingent on having a strong financial sector, and the government should bring down its stake in public sector banks to below 50 per cent through the market route over the next 12 months, except for 3-4 large banks such as State Bank of India, Bank of Baroda and Union Bank.