Jaitley will budget for all views on public spending
NEW DELHI: Faced with divided views on public spending, finance minister Arun Jaitley on Saturday said he was actively considering the pros and cons of higher public spending and its impact on the fiscal maths. Jaitley said the final decision on the fiscal deficit target would be spelled out in the budget based on the resources, growth potential and tax buoyancy. Jaitley’s comments came in the wake of RBI governor Raghuram Rajan’s statement warning the government over increased borrowings to spur spending for higher economic growth risking macroeconomic stability.
“I can tell you I have been consulting all shades of opinion. This is the first time that I have come across people holding sharply divided views and each one has a strong argument in his favour. There is an argument being given that in the current economic situation public investment holds the key,” Jaitley said. “Then there is another argument, and the alternate argument is also equally important with regard to credibility of government. One year you deviated from target, will you do it again and particularly if oil prices are onethird of what they were? If you still can’t meet the target, when will you do that? And, therefore, both the arguments have a way.”
CONTINUED ON P4