Interim Budget 2019-2020 – Speech of Piyush Goyal
Full text of the speech of Piyush Goyal – Interim Budget 2019-2020
Interim Budget 2019-2020 Speech of Piyush Goyal Minister of Finance
February 1, 2019
I rise to present the Interim Budget for the year 2019-20.
2. I am deeply conscious of the absence of Shri Arun Jaitley today.
I am sure the House joins me in wishing Shri Jaitley speedy recovery, good health and a long life in the service of the nation.
3. Madam Speaker, the people of India gave a strong mandate to our Government. Under the visionary leadership of Hon’ble Prime Minister Shri Narendra Modi, we have given the most decisive, stable and clean Government and have undertaken transformational structural reforms. We have reversed the policy paralysis engulfing the nation and have restored the image of the country. The major achievement of this Government was that we strived our utmost to change the mind-set and ignited the self confidence of the nation.
4. I can proudly say that India is solidly back on track and marching towards growth and prosperity. We have prepared the foundation for sustainable growth, progress and better quality of life for all our people.
5. We are moving towards realising a ‘New India’ by 2022, when we celebrate 75 years of India’s independence: an India which is clean and healthy, where everybody would have a house with universal access to toilets, water and electricity; where farmers’ income would have doubled; youth and women would get ample opportunities to fulfil their dreams; an India free from terrorism, communalism, casteism, corruption and nepotism.
State of the Economy
6. Madam Speaker, the last five years have seen India being universally recognised as a bright spot of the global economy. The country witnessed its best phase of macro-economic stability during this period. We are the fastest growing major economy in the world with an annual average GDP growth during last five years higher than the growth achieved by any Government since economic reforms began in 1991. From being the 11th largest economy in the world in 2013-14, we are today the 6th largest in the world. Besides generating high growth rate, we contained double-digit inflation and restored fiscal balance.
7. Inflation is a hidden and unfair tax on the poor and the middle class. The average rate of inflation during 2009-2014 was a backbreaking 10.1%. The then Prime Minister admitted as much when he said, “We have also not been as successful in controlling persistent inflation as we would have wished. This is primarily because food inflation has increased.” In contrast, our Govt. broke the back of back-breaking inflation. We brought down average inflation to 4.6% which is lower than the inflation during the tenure of any other Government. In fact inflation in December 2018 was down to 2.19% only. If we had not controlled inflation, our families would have been spending around 35-40% more today on basic necessities such as food, travel, consumer durables, housing etc.
8. From the high of almost 6% seven years ago, the fiscal deficit has been brought down to 3.4% in 2018-19 RE. The current account deficit (CAD), against a high of 5.6% six years ago, is likely to be only 2.5% of GDP this year. We contained the fiscal deficit notwithstanding the Finance Commission’s recommendations increasing the share of the States from 32% to 42% in central taxes, which we accepted in the true spirit of cooperative federalism, thereby transferring significantly higher amounts to the States.
9. Due to a stable and predictable regulatory regime, growing economy and strong fundamentals, India could attract massive amount of Foreign Direct Investment (FDI) during the last 5 years – as much as $239 billion. This period also witnessed a rapid liberalisation of the FDI policy, allowing most FDI to come through the automatic route.
10. Madam Speaker, the last five years have witnessed a wave of next generation structural reforms, which have set the stage for decades of high growth. We have undertaken path breaking structural reforms by introducing Goods and Services Tax (GST) and other taxation reforms.
Banking Reforms and Insolvency and Bankruptcy Code (IBC)
11. The period of 2008-14 will be remembered as a period of aggressive credit growth and, as per RBI, the primary reason for spurt in non-performing loans and stressed assets. Outstanding loans of public sector banks ballooned from Rs.18 lakh crore to Rs.52 lakh crore during this period. Many projects were started that could either not be completed or had low capacity utilisation resulting in their inability to pay back their loans. There were high stressed and non-performing assets (NPAs) amounting to Rs.5.4 lakh crore in 2014. Many more were hidden through restructuring or otherwise which were discovered during Asset Quality Reviews and inspections carried out since 2015.
12. We put a stop to such questionable practices and stopped the culture of “phone banking”. The 4Rs approach of recognition, resolution, re-capitalisation and reforms has been followed. A number of measures have been implemented to ensure Clean Banking. Through a transparent and accountable process, we recognised these NPAs. The Insolvency and Bankruptcy Code has institutionalised a resolution-friendly mechanism, which is helping in recovery of non-performing loans while preserving the underlying businesses and jobs. Earlier, only small businessmen used to be under pressure of repayment of loans while in the case of big businessmen, it was the headache of banks. But now, defaulting managements are either paying or exiting their businesses. An amount of close to Rs.3 lakh crore has already been recovered in favour of banks and creditors. To restore the health of public sector banks, recapitalisation has been done with an investment of Rs.2.6 lakh crore. Amalgamation of banks has also been done to reap the benefits of economies of scale, improved access to capital and to cover a larger geographical spread.
Steps against corruption
13. We have ushered in a new era of transparency. We have given a corruption free government. The Real Estate (Regulation and Development) Act, 2016 (RERA) and Benami Transaction (Prohibition) Act, 1988 are helping to bring transparency in the real estate sector. The Fugitive Economic Offenders Act, 2018 will help confiscate and dispose off the assets of economic offenders who escape the jurisdiction of the laws in India. Additionally, we conducted transparent auction of natural resources including coal and spectrum. We have walked the talk.
14. As a tribute to Mahatma Gandhi’s 150th birth anniversary in 2019, our Government initiated the world’s largest behavioral change movement with the Swachh Bharat Mission. India has achieved 98% rural sanitation coverage and as many as 5.45 lakh villages have been declared “Open Defecation Free.” It is a holistic programme and has succeeded in changing the mindset of our people. With the people participation, they transformed it from a Government Scheme to a national movement. I thank the 130 core people of the nation for the success of Swacch Bharat Abhiyan who adopted it whole heatedly.
Poor and backward classes
15. The poor have the first right on the resources of the nation. The Government while maintaining the existing reservation for SC/ST/Other Backward Classes, have now ensured 10% reservation in educational institutions and Government services for poors. In these institutions, around 25% extra seats (approximately 2 lakh) will be provided so that, there is no shortfall of presently available/reserved seats for any class.
16. To provide food grains at affordable prices to the poor and middle classes, about Rs.1,70,000 crores were spent in the year 2018-19 which is almost double the amount of Rs.92,000 crores spent in the year 2013-14. We ensured that everyone gets food and none goes to sleep hungry. Rs.60,000 crores are being allocated for MGNREGA in BE 2019-20. Additional amount would be provided if required.
17. We have worked to bridge the urban-rural divide in the country. Hon’ble Members in this August House, most of whom are from rural areas, will agree that several times in the past, only empty promises have been made to people living in our villages. During the last five years, we have undertaken targeted expenditure to improve their quality of life in all its dimensions. Our aim, is to provide urban facilities in villages while keeping the soul of rural life intact.
18. Under the Pradhan Mantri Gram Sadak Yojana, construction of rural roads has been tripled. 15.80 lakh habitations out of a total of 17.84 lakh habitations have already been connected with pucca roads and work is going on to complete the rest very soon. Pradhan Mantri Gram Sadak Yojana (PMGSY) is being allocated Rs.19,000 crore in BE 2019-20 as against Rs.15,500 crore in RE 2018-19. There was time when a child used to reach school after walking on a foot trail, today the situation has changed and a bus can reach her/his village During the period 2014-18, a total number of 1.53 crore houses have been built under the Pradhan Mantri Awas Yojana.
19. Till the year 2014, about 2.5 crore families were forced to live the life of 18th centuary without electricity. Under ‘Saubhagya Yojna’, we provided free electricity connection to almost every household. By March, 2019, all willing families will get electricity connection. In mission mode, we have provided 143 crore LED bulbs with the participation of private sector. This has resulted into a savings of approximately Rs.50,000 crore per year in electricity bills of poor and middle class families.
20. Madam Speaker, past five years have seen massive scale up of health care. Earlier, a poor man used to be in dilemma whether to fulfil daily needs of the family or save the life of an ailing member. This situation has deeply pained our Hon’ble Prime Minister. We launched the world’s largest healthcare programme, Ayushman Bharat, to provide medical treatment to nearly 50 crore people. Already close to 10 lakh patients have benefited for medical treatment which would have cost them Rs.3,000 crore through free treatment made available under the scheme. Lakhs of poor and middle class people are also benefiting from reduction in the prices of essential medicines, cardiac stents and knee implants, and availability of medicines at affordable prices through Pradhan Mantri Jan Aushadhi Kendras.