Next Budget to focus on growth despite global slowdown: FM

New Delhi, October 12

The last full Budget of the Modi government to be presented on February 1, 2023, will be “very carefully structured” to help the economy sustain growth momentum and rein in inflation, Finance Minister Nirmala Sitharaman has said in Washington.

She was among the two Finance Ministers, who are in the US for the International Monetary Fund (IMF)-World Bank annual meeting, invited by the Brookings Institution on Tuesday for an interaction with its economic policy faculty.

Will address inflation concerns

It will be difficult to list out the specifics (of the next Budget) at this stage because it’s a bit too early. But broadly, the growth priorities will be kept absolutely on the top. Inflation concerns will have to be addressed. —Nirmala Sitharaman, Finance minister

Faced with the twin challenges of slowing growth rate and high inflation, she identified high energy prices among the key problems facing the Indian economy in the near future.

Though the Modi government will present a Budget in 2024, it is likely to be a vote-on-account.

“It will be difficult to list out the specifics (of the next Budget) at this stage because it’s a bit too early. But broadly, the growth priorities will be kept absolutely on the top. Inflation concerns will have to be addressed. But then how would you manage growth would be the natural question,” the minister said about the Budget at a fireside chat with Brookings faculty Eshwar Prasad.

In the face of a tighter monetary policy and a global slowdown, Sitharaman said, “But that’s the point of being sure how you’re going to balance the two and be sure that the momentum that the Indian economy has got coming out of the pandemic and the momentum with which it will grow next year cannot be weakened. So, it will have to again be a very carefully structured Budget, in which growth momentum will have to be sustained.”

The World Bank and the IMF have held that the growth momentum in the Indian economy is slowing down on the basis of deceleration in industrial production and exports, and moderately high inflation.

The RBI, too, has thrice cut GDP growth projection during the year and so have other rating agencies due to geopolitical tensions, tightening global financial conditions and slowing external demand.

Sitharaman said the global stress that hit India in three areas — energy, fertiliser and food — was being “carefully” watched and the government was trying to make sure that the stress “doesn’t get passed on to the people”.

Asked about the high taxes, the Finance Minister said excise duty on fuel was brought down so that the common man didn’t bear the brunt of increasing fuel prices. “That is one way in which we’re making sure that vulnerable sections don’t get hurt,” she said.

India’s Ambassador to the US Taranjit Sandhu, Department of Economic Affairs Secretary Ajay Seth and Chief Economic Adviser V Anantha Nageswaran also attended the fireside chat.

Meanwhile, Sitharaman interacted with her Japanese counterpart, Shunichi Suzuki on, the sidelines of the IMF-WB annual meeting in Washington. She told Suzuki that this year was special for India-Japan relations as both nations were celebrating the 70th anniversary of establishment of diplomatic relations and India was celebrating 75 years of Independence.