Treasury Secretary Tuhin Kanta Pandey said the 2025-26 budget is trying to drive growth in a non-inflammatory manner and keeping its commitment to financial integration. In an interview with TOI,Pandey, who also works in the income department, said The budget has allowed all levers of growth to accelerate. exception:
Do you think the budget has done enough to accelerate growth against the backdrop of global uncertainty?
It’s a growth promotion budget. There are headwinds and internal challenges. I dealt with both. We are still the fastest growing large economy in the world, but we need to not only maintain this growth, but we must push it up. It dealt with both the supply and demand sides, attempted in non-inflationary ways to maximize growth and accelerate growth.
It’s time for For example, financial authorities play a role in accelerating growth, such as interest rate reductions?
I think it depends on the MPC (Monetary Policy Committee) to call it. But financially, we did a bit. We have kept our commitment to fiscal consolidation. FM announced that it would reach 4.9% this year, achieving 4.8%. FM said the fiscal integration pathway means it will bring it to 4.5% next year. We have proposed 4.4% and there was also an announcement that there will be a glide pass from debt in terms of GDP levels, giving us visibility into how it will move forward. It is also included in the FRBM statement.
So did the budget create the conditions for rate reduction?
In a way, budgets provide the stimulus you need. By increasing the deficit, we are not offering stimulation at the expense of deficits. So we are giving financial authorities plenty of comfort. But they need to make a call based on what.
Is tax relief primarily to promote consumption and address some of the concerns of the middle class?
I think consumption is part of it. But we don’t actually prescribe how this money is behavioured or how the taxpayers acted. Basically, decisions are transferred to the taxpayer who has received this relief. They may choose to consume, store, or directly invest in any of the three situations we have. If they choose to consume, it will boost demand, so it will have a beneficial and positive impact on the economy. If they choose to invest indirectly, they are helping the bank to expand their credit. This is because banks can only give credit if there is an increase in deposits. And if they choose to invest directly in the home, they will also take part in the investment. In that case, it works like an investment multiplier anyway. Therefore, it is a combination of consumption and investment multipliers, which has a positive effect on savings. Overall, I would say it will become a growth booster.
Do other economic levers pay the necessary attention apart from consumption and investment?
A large economy like India requires all engines to be fired. We cannot say we go for farming, not manufacturing. Or go to manufacturing, not for service. So you need all three. If all the suggestions were displayed on the supply side, I tried to see how to speed up production, how to speed up productivity, how to promote employment. So it is employ-driven growth. In agriculture, measures have been taken to increase pulse productivity and increase farmers’ credit limits. We’ve mentioned ways to increase production and productivity everywhere. We say MSME has a growth pathway. Make sure you have more credits available to MSMES. There is more participation in exports. Let them have more support from an innovation and research perspective. Our tax policy supports the labor-intensive sector.
When will the bill be presented in Congress? How do taxpayers’ lives become simple?
It is proposed to take place before February 13th. We have not changed our policy through it. The same will be carried forward as this bill will apply from a future date. I wanted to reform right away. Therefore, these reforms were brought to this bill through amendments. There are so many redundant regulations. There are many changes. Since the law was enacted in 1962, more than 4,000 changes have occurred. Sixty-three years later, the finance division was changed, with more taxation laws and amendments. Things can become complicated to read and can also cause interpretation problems. There could be many interpretation issues and litigation. If it’s readable, there will be fewer litigation cases if it’s clarified.
