New Delhi: Despite the growing fiscal deficit, the central government will continue spending. Union Finance Minister Nirmala Sitharaman said that the government can increase spending to support the economy, even if it increases the budget deficit further. In an interview, She said that the government will not take a decision to reduce the incentive spending (relief package) in a hurry. Apart from this, it will be ensured that all government companies continue capital expenditure. The Union Finance Minister said that the situation needs to be increased in this situation at this time and there is no need to worry about the fiscal deficit.
Last month, the government took measures to provide relief packages equal to 15 percent of the economy to salvage companies badly hit by the Corona epidemic and save jobs. With this decision, by the end of the current financial year, the budget deficit can increase to 8 percent of GDP, which is more than double of the target of 3.5 percent. The Finance Minister said that an assessment is needed for the coming time. He says that it is not possible to think of any immediate cut in expenses. He says that the balance of spending has to be maintained because the recovery that has taken place in the economy is necessary for it to remain consistent.
Due to the steps taken by the government, recovery in the economy has started showing. In the first quarter of the current financial year, GDP was expected to fall drastically in the second quarter after shrinking at a record rate of 24 per cent. However, due to the efforts of the Central Government, GDP declined at 7.5 percent in the second quarter. Apart from this, the increase in some sectors has also indicated that the economy is improving.