The budget is fiscally conservative and will help achieve the fiscal deficit target of 4.5% in fiscal year 2026: NITI Vice Chairman Suman Bery

NITI Aayog Vice Chairman Suman Bery on Friday described Finance Minister Nirmala Sitharaman’s pre-election budget as “fiscally conservative” and expressed confidence that the government will achieve the fiscal deficit target of 4.5 per cent of GDP by 2025-26.

Sitharaman on Thursday announced a Rs 1,111 crore investment in infrastructure and vowed to continue reforms as she refused to resort to populist measures in the Modi government’s last budget before the election, opting instead to continue cutting deficits while Measures to support focus groups.

“I think the interim budget is fiscally conservative and actually breaks new ground and provides an indication of what might be included in the actual main budget, which is due to be tabled in July,” he told PTI in an interview.

Berry further said the fiscal results of this year’s budget were better than expected.

“We will achieve the fiscal deficit target of 4.5 in 2025-26 because that is important, both substantively and signally,” he added.

The Modi government continues to follow a prudent fiscal path and announced no populist measures in the interim budget, which will help it reduce the fiscal deficit to 5.1% of GDP in the next fiscal year and reduce the fiscal deficit in fiscal 2026. to 4.5% of GDP.

Berry said there are several signs that private investment will recover.

Responding to a question on capital expenditure for the next fiscal year, he pointed out that the increase in capital expenditure was due to the paralysis of the economy during the COVID-19 pandemic.

“The logic is that in the short term, the multiplier returns associated with capital expenditures are much greater than revenue expenditures,” Berry said.

The actual capital expenditure growth announced in the budget was 11%, which is well below the 33% capital expenditure growth target in the 2023-24 budget. Still, it would keep the government’s infrastructure investment agenda going and, if realized, would take capital investment to a record 3.4% of GDP.

Asked how the measures announced in the budget would help create more jobs, he said, “The issue is not jobs, the issue is good jobs”.

He claimed that unemployment has been falling and said India had problems matching workers with jobs.

Responding to a question on the plight of agriculture, Berry said India’s agricultural productivity is much lower than it should be.

There are many announcements in this budget aimed at improving agricultural productivity, he added.

When asked what reforms the government should take to make India a developed country by 2047, Berry said India has made great progress in reforming the tax system.

“India needs some next-generation reforms, which one might call process reforms rather than pricing reforms. These are more difficult and some reforms have to be done at the state level,” he said.

(This story has not been edited by News18 staff and is published from associated news agency – PTI)