Won't pass debt burden to future generations: Finance Minister Nirmala Sitharaman

Union Finance Minister Nirmala Sitharman on Friday said the central government is mindful of the fiscal deficit management and will ensure the burden of servicing debt is not passed on to the next generation. She was addressing the Kautilya Economic Conclave 2023 when she said the government is looking at the ways in which it can bring down the overall debt.

"We are conscious of matters related to the macroeconomic stability of the country and responsibility with which we deal with our fiscal and also the fiscal management and so for every decision that we take today, we are conscious of what burden is going to leave for the next generations," she said.

She said it is very easy to be profligate and burden the coming generations with the current debt.

"We are conscious of the debt of the government of India. Compared to many others, it might not be as high as it is, but even then, we are consciously looking at experiments in different parts of the world," Sitharaman said.

Sitharaman also said the government is actively looking at the data related to the debt of some emerging market countries and how they are managing them. She added that the government is successful in managing the debt burden because efforts are very well streamlined to meet India's aspirational requirements.

She said during Covid pandemic, the government spent public money to create public infrastructure so that there was a better return for every Rupee rather than go by the temptation of giving money to the hands of people who were suffering.

"We didn't do that (give people money directly)... I think some Principles of Economics stand the test of time and that is why (the government decided) to spend money in capital expenditure and with a digitised approach so that people can see where that money is going," she added.

Observing that India is opening-up and bringing greater transparency through the digital economy, Sitharaman said, there's no more powerful tool than digitisation to empower citizens, who otherwise would've remained very far from their developmental aspirations being met.

"Jan-Dhan accounts have been the biggest instrument of bringing financial inclusion to the country. When it was launched in 2014, people raised questions, saying that these would be zero-balance accounts & would be a burden on the Public Sector Banks (PSBs)," she said.

Today, these Jan-Dhan accounts have a cumulative balance of more than Rs 2 lakh crore, the Finance Minister added.

During COVID-19, she said, due to these Jan-Dhan accounts, the poorest of the poor received money in their accounts from the government to fulfill their essential needs. Finance Minister Nirmala Sitharaman also said that multilateral institutions including Multilateral Development Banks (MDBs) have become less effective in the current global situation.

She highlighted the challenges posed by global terror and stressed that investors and businesses will have to take into account such factors while making investment decisions.