After completing month-long discussions with central ministries on Friday, the Centre will now have extensive consultations with states before finalising the Union budget for the next financial year, and the first such meeting with the chief ministers and states finance ministers will be chaired on Monday by finance minister Nirmala Sitharaman, according to people familiar with the matter.
“The finance minister seeks to embark on a collaborative growth vision for the nation and encourage an open exchange of ideas centered on enhancing the investment climate of the country. The envisaged interaction will attempt to create a policy discourse and a facilitative environment for inward investment-led growth,” the finance ministry statement said.
Replying to a specific question that some central ministries during the month-long pre-budget discussions flagged concerns about Centre-state coordination on implementing welfare schemes, finance secretary TV Somanathan said: “These budget meetings are about fixation of expenditure budgets for current year and for the next year.”
The finance ministry’s pre-budget discussions with about four dozen central ministries and departments at North Block to finalise the FY23 budget estimates came to end on Friday. HT on November 6 wrote that the government’s ongoing discussions related were primarily centered on two key points—welfare schemes and infrastructure development.
Speaking about the virtual interaction between the finance minister and top state officials on November 15, Somanathan said the meeting was not to discuss revenue and state finances, as such matters will be taken up in other forums. “Let me [be] very explicitly clear, this is not the forum to discuss states revenues or state finances. It is to discuss economic impulses in the states,” he said.
Somanathan said the FM will interact with states on wide-ranging issues, and there is no fixed agenda. “It is a matter of dialogue between the two sides. Anything and everything is in or out, it is up to the participants…. What is relevant to agenda is stimulating investment and growth,” he said.
One finance ministry official said, requesting anonymity, that the Union government wants to take all states on board while planning the budget for the fiscal after the Covid-19 pandemic as accelerating inclusive growth is a key focus area. “The FM may again meet states’ finance minister at the GST Council before the budget to pursue the growth agenda,” the official said.
“While the investor sentiment is good, there is a need to capitalise on the momentum already created. The first four months of FY 2021 have already witnessed inflows of $64 billion Foreign Direct Investment (FDI). Government of India (GoI) in its Union Budget 2021-22 has given further impetus to inflow of foreign investment capital through streamlining procedures, removing roadblocks and providing necessary incentives,” it added.
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