Nirmala Sitaraman. Photo: PTI
New Delhi: Union Finance Minister Nirmala Sitharaman has said that "freebies" and subsidies should be contextualised and no one will have objection if there are budgetary provisions with compliance to fiscal rules for any such promises.
Replying to the debate on the Supplementary Demands for Grants in the Rajya Sabha, the minister said that there should be transparency and compliance with statutory fiscal rules and discipline.
During the discussion, AAP leader Raghav Chadha had slammed the government, saying that while the welfare provisions in the supplementary demands for grants were "subsidies," the spending by opposition for welfare of people were termed freebies by the BJP.
"Subsidies and freebies are to be contextualized. If you are able to put it in your Budget and make a provision for it when your revenues come and you give the money, why would anyone have an objection? Education, health, and many subsidies given to farmers are fully justified," Sitharaman said.
"It is important to recognise that when you are transparent in your methods, there is no debate over it. All we want is transparency and compliance with statutory fiscal rules," she added.
The minister said the government is keeping an eye on inflation.
"We are keeping a good eye on inflation that is purely extraneous nowadays because of fuel and fertiliser prices," he said.
Sitharaman said there are media reports that one state government is unable to timely pay the salary of its employees and the employees are protesting.
"It's perhaps because funds are being used to give numerous different advertisements all over the country," she said.
The minister replied to points raised by former Finance Minister P Chidambaram and said the government would mobilise resources for the amount involved in the supplementary demands for grants.
Referring to the economic difficulties being faced by some countries in the wake of decisions taken during the COVID crisis, Sitharaman took a dig at Chidambaram and said "borrow and spend and even print money to reboot the economy was the suggestion by former Finance Minister and others during COVID".
"As we close 2022, we should look at the negative effect of use of this suggestion by other countries, which have gone into recession," the minister said.
"Because of the targeted approach in which the government decided to give relief during COVID and address concerns given as inputs from various stakeholders, it has kept India on safe course of revival and also not getting into recession.
"Many large developed economies are facing recession because I think the way in which they handled Covid as different from the way in which we handled it in India...Targeted approach has kept us on the safe course of helping revival but not getting into recession," she added.
Sitharaman said gross NPAs have come down to 6 year low of 5.9 per cent in March 2022.
"Corporate sector has been deleveraging its balance sheet as evident in decline of core debt of private non-financial sector which has decreased to 87.8 per cent of GDP in June 2022 from 97.4 per cent in March 2016".
Sitharaman said that private investment capex is happening in India because of favourable policies like PLI.
She hit back at Chidambaram for his remarks that government had given a "corporate bonanza".
"In 1994 under Congress, corporate tax was cut to 40 from 45 per cent. In 1997, it was reduced to 35 per cent by P Chidambaram. It was former FM again who reduced Corp tax rate to 30 per cent in 2005. Was it 'Bonanza' for corporates then? If not, how is it now?"
The minister said between 2004-14 when UPA was in power, so many opposition ruled states were deliberately put to difficulty that RJD member Manoj Jha's words about "trouble making" or "trouble engine" are actually true.
She said as per NCGTC, total guaranteed amount for loans to MSMEs is 3,58,894 crore, against which NPAs outstanding are Rs 13,964 crore, which is only 3.89 per cent of total amount guaranteed. MSME sector has been given due support which helped them during COVID, the minister said.
She said in 2013-14, food subsidy was Rs 92,000 crore only. "Whereas in BE 2022-23, we have provided for Rs 2,06,931.09 crore for food subsidy. And after this supplementary, the allocation would be more than Rs 2.80 lakh crore"
The minister said in November 2022, Centre released Rs 17000 crore as GST compensation for the period April-June 2022. "So, total amount of compensation released to the States and UTs is Rs 1,15,662 crore."
In May 2022, Centre released Rs 86,912 crore as provisional GST compensation to states for the period Feb-May 2022 despite the fact that there was only Rs 25,000 crore available in GST compensation fund and sent Rs 62,000 crore from its own resources.
"To help our states, Centre itself took a loan of Rs 1.10 lakh crore in 2020-21 and Rs 1.59 lakh crore and released it back-to-back to states to meet the fiscal gap created due to lesser GST collection."
Referring to another remark of Raghav Chadha, Sitharaman said he was a qualified accountant and should look into numbers before he speaks.
"He said inflation is high & in double digit. He should notice that WPI inflation is at 21-month low of 5.85 per cent. Wholesale food inflation is at 2.17 per cent."
She said the share of the central taxes used to be given out on the 20th of every month and just to help the states to have the money earlier, "we have advanced it to 10th of every month. Now, states receive the share of central taxes, 10 days in advance".
The minister said that for 2021-22, amount utilised in several cesses is more than collected.
"Road and infrastructure collected - Rs 1,95, 987 crore, amount utilised by states - Rs 2,51,738 crore; health and education cess collected Rs 52,732 crore, amount utilised - Rs 78,287 crore," she said.
"Today, the situation is that we have come up with the demand of grants which are essential for ensuring there is food security and there is also enough to be given for fertilizers which is also crucial for our farmers," the minister noted.
The Rajya Sabha returned the Supplementary Demands for Grants to the Lok Sabha, authorizing the payment of Rs 3.25 lakh crore from and out of the Consolidated Fund of India for the current financial year ending March 2023.
The Bills-Appropriation (No 5) Bill, 2022 and the Appropriation (No 4) Bill, 2022- which Lok Sabha earlier passed, were cleared in the Upper House with a voice vote followed by a detailed discussion held on Monday and Tuesday.