New Delhi, July 23
Ajay Seth, Secretary at Department of Economic Affairs under Ministry of Finance said fiscal consolidation by way of gliding down on fiscal deficit path is being done while meeting all essential expenditure.
"Fiscal consolidation is being done while meeting all essential expenditure, meeting all priority expenditure, providing for new initiatives like employment in the skilling this year and is still leaving enough for the private sector and taking the government finances to a more sustainable," said the Secretary talking to ANI on the Budget day.
The fiscal deficit target for 2024-25 is pegged at 4.9 per cent, better than what was estimated in the Interim Budget.
"We have got some more money from RBI (as dividend), and that has been utilized to retire some of the high-cost debt, etc. So we are fairly confident about 4.9 per cent, and this is on way to the final goal, or rather the next step, which has been announced, to become less than 4.5 per cent," said the Secretary.
He further explained that the purpose behind it is that if the government is borrowing moderately, there will be more money available for the private sector business.
Presenting the Union Budget for 2024-25, Union Finance Minister Nirmala Sitharaman on Tuesday pegged the fiscal deficit target at 4.9 per cent of gross domestic product (GDP).
In the Interim Budget tabled on February 1, she pegged it at 5.1 per cent of GDP.
The difference between total revenue and total expenditure of the government is termed as the fiscal deficit. It is an indication of the total borrowings that may be needed by the government. The government intends to bring the fiscal deficit below 4.5 per cent of GDP by the financial year 2025-26.
Coming back to the Secretary, he was asked about the declining FDI and what could be done to improve, he replied by saying that most FDIs are approved through automatic route.
He stressed on creating conditions in the economy so that the investments can be attracted.
"As far as policy is concerned, we are all aware that most of the things are already on the approval, on the automatic approval. They don't require approval. Yes, (however) there are issues in terms of the procedure part, that how creating conditions so that more and more investment can be attracted into the economy," Seth added.
Media reports citing RBI data noted that India's net FDI inflow dropped by 62.17 per cent to USD 10.58 billion during the financial year 2023-24, marking a 17-year-low.
"When we talk about that, net FDI last year, was a bit low, but that was a net figure, meaning that there was a repatriation of profits from the country. The gross FDI was not really significantly lower than what it has been in the earlier years," the Secretary reacted.
Further, he outlined how the government has eased 'ease of doing business' here in India.
"Today a foreign investor comes in, wants to set up a manufacturing plant, one can get land of say 10 acres in three months. That is really the idea is to create more and more those opportunities that make it easier for foreign entities to come and set up start doing business in it," Seth said.