The budget for 2025-26 struck a fine balance between national priorities and fiscal prudence amid strong external headwinds, she emphasised.
Replying to a general discussion on the budget in the Lok Sabha, Sitharaman said, “Our main goals in this budget are (to realise) good growth, secure inclusive development, invigorate private investments and uplift household sentiments.”
The country’s annual growth rate averaged 8% over three years through 2024-25 and only in two out of the past 12 quarters did the pace of expansion hit the September quarter level of 5.4% or lower, she said.
The Economic Survey projected growth in 2025-26 at 6.3-6.8%.
The finance minister called on states to consolidate their debt stocks, taking a cue from the Centre’s new debt reduction framework presented in the budget. The framework will provide better guidance to the markets and bring in “greater predictability” about the Centre’s indebtedness, she said.The Centre aims to pare down its debt to 50% (plus or minus 1%) of gross domestic product (GDP) by March 2031 from about 57.1% now. Its debt ratio had surged to 61.4% in the pandemic year of 2020-21 from 52.4% in the previous fiscal. The Centre’s overall liabilities comprise mainly domestic loans and external debt accounts for only about 3.4%, Sitharaman said, underscoring the government’s healthy debt profile despite the rise in overall debt stock in recent years. Moreover, the government has been deploying a dominant share of its borrowings in creating capital assets in recent years, a sign of healthy practice, she said.While the Centre’s fiscal deficit is pegged at 4.4% of GDP for 2025-26, its effective capital expenditure—which includes both budgetary capex outlay and grants-in-aid to states for capital assets creation—is estimated at 4.3%, she said.
“So, the borrowings are not going for revenue expenditure, or committed expenditure, or any of those kinds. They are going only for creating capital assets,” she said.
The finance minister highlighted unspent funds lying with states for various programmes backed by the Centre, nudging them to utilise the money for which it has been allocated. The unspent money involves programmes such as Swachh Bharat Mission-Urban (Rs 12,319 crore), Samagra Shiksha (Rs 11,516 crore), human resources for health and medical education (Rs 7,059 crore), midday meal (Rs 5,205 crore), assistance for intra-state movement of grains, etc. (Rs 4,636), flexible pool for reproductive child health and health system, etc. (Rs 2,988 crore), and Rashtriya Krishi Vikas Yojana (Rs 1,395 crore), the minister said.
‘NO CUT IN SOCIAL ALLOCATION’
Sitharaman stressed that the government hasn’t reduced allocations for key sectors in the latest budget. The agriculture sector has got Rs 1.71 lakh crore, rural development Rs 2.67 lakh crore, urban development and transport sectors Rs 6.45 lakh crore, health and education Rs 2.27 lakh crore and defence, excluding pension, Rs 4.92 lakh crore.
She also listed out support extended to key opposition-ruled states such as West Bengal, Tamil Nadu, Karnataka and Kerala, refuting allegations of apathy on the part of the Modi government.
INFLATION AND RUPEE
Sitharaman said while food inflation, a key driver of price pressure at the retail inflation, during the NDA regime (1999-2004) was only 2.2%, it shot up to 6.5% and 11%, respectively, during the UPA-I and UPA-II government. The Modi government, in its ten years, has brought it down to 5.3%, she said.
Commenting on the latest rupee depreciation against the US dollar, the minister said the domestic currency remains among the best performing ones.
Between October 2024 and January 2025, the currencies of South Korea, Indonesia and Malaysia depreciated by 8.1%, 6.4% and 5.9%, respectively, against the greenback. The G-10 currencies weakened by more than 5.5%, the Japanese yen by 7%, the British pound 6.6% and the euro 5.8%. In contrast, the rupee weakened less than 3%.
BSNL PACKAGE In response to questions, Sitharaman highlighted the revival packages extended to state-run BSNL by the Modi government—Rs 69,000 crore in 2019, Rs 1.64 lakh crore in 2022 and Rs 89,047 crore in 2023.
BSNL’s market share had fallen to less than 8% in 2015 from as much as 19% in 2005, the minister said, pointing at the UPA government’s inability to revive the struggling state-run telecom company
Content Source: economictimes.indiatimes.com