New Delhi:
For a growing economy to meet its needs and aspirations, borrowing is a must, but the focus of the finance ministry under her is to ensure that debt is reduced without affecting growth, Nirmala Sitharaman has told NDTV.
In an exclusive interview with NDTV’s Editor-In-Chief Sanjay Pugalia on Friday, Ms Sitharaman said fixing a number for the eventual fiscal deficit and working towards it with temporary solutions every year can be one way of going about things, but it is not the right way from a macroeconomic perspective.
Ms Sitharaman, who became the first finance minister in India’s history to present seven Union Budgets in a row this year, said, “We have chosen a healthy option for getting the fiscal deficit closer to the number. Instead of looking at the number alone, it is also about the way you decide to get there. An obvious method for every country is to reduce debt, but borrowing is a must for a growing economy. The question is how much are you borrowing and where it is being used.”
“Are you using it for asset creation or to service or reduce the existing debt? If the growth in the debt is to be reduced, borrowing more to reduce debt is not the right thing to do. So you borrow and create assets. We have studied the NK Singh Committee report (on fiscal responsibility) and held discussions and decided that we won’t look at the number alone but choose the right path to reduce debt without affecting your growth, desires and aspirations,” she explained.
