Budget unveils wide-ranging steps to sustain growth momentum: FM

Finance minister Nirmala Sitharaman said the budget has announced a wide range of steps to maintain the growth momentum. At a press briefing, she said the budget's gradual fiscal consolidation plan factors in growth imperatives amid global headwinds. She said the proposed rare earth corridors and chemical parks will reduce our import dependence. The minister also allayed concerns about a potential fund shortage for the new rural job scheme. Edited excerpts:

On reforms to push growth

This budget is shaped by the Viksit Bharat by 2047 vision. We are laying the path and giving a push to the economy to maintain the growth momentum. Many reforms have been carried out. We will continue to undertake reforms... with an aim to make sure that we create an environment for improving productivity and generating employment.


On semiconductor mission 2.0 and rare earths

The India Semiconductor Mission 2.0 will improve the India Stack and IP-related matters. Increasing allocation for the Electronic Components Manufacturing Scheme to Rs 40,000 crore is a major encouragement for the electronics industry to become self-sufficient. We have also announced the establishment of rare earth corridors so that India is able to meet its requirements. Once we identify and explore these minerals and process them...our dependence on external sources in rare earths will drop. We've identified the states where we want to establish these rare earth corridors. They are Odisha, Kerala, Andhra Pradesh and Tamil Nadu. Also, the proposed three dedicated chemical parks (will) reduce our import dependence.

On support for MSMEs

We want to help create champion MSMEs. Small and medium industries and entrepreneurs are going to be given all the support, and a three-pronged approach is being taken up there. We are giving equity support, liquidity support, and above all, professional support for them. The equity support is backed by a Rs 10,000-crore SME Growth Fund. We are also topping up the Self-Reliant India Fund (for micro enterprises) with Rs 2,000 crore. The budget proposes several other steps to help MSMEs.

On panel for banking reforms

The proposed high-level committee would go into the entire expanse of the banking sector so that they come up with recommendations which help us to plan for banking for 2047. We need to understand what are the steps that we need to take in the banking area and, based on the recommendations, we'll go forward. As for the restructuring of state-owned NBFCs (PFC and REC), we want to streamline it and, therefore, we will be taking some steps.

On fiscal consolidation, nominal growth

Drastic fiscal consolidation at a certain stage doesn't go down well, as one section or the other gets hurt. We will have to have gradual consolidation (so that the economy doesn't suffer). At the same time, we will keep the deficit within a band that would show that we care for prudent fiscal management. So it (fiscal deficit at 4.3% of GDP) is a responsible and realistic number. As for nominal growth, inflation is down in India. I think our nominal GDP assumption (of 10% for FY27) is realistic.