Sitharaman: Financial strength is vital for 'Atma Nirbhar Bharat.'

Union Finance Minister Nirmala Sitharaman said on Saturday that certain states' indiscriminate borrowing and spending on non-merit products and expenditure is a cause for concern, and fiscal strength is a crucial component for 'Atma Nirbhar Bharat.'

She warned that the temptation to borrow beyond capacity would result in intergenerational burdens and have an impact on the country's fiscal health.

"Every state is experiencing new sources of risk." The desire to spend money on non-essential items... "The inclination in some states to engage in such unsustainable, non-merit expenditure is very significant," she said.

Sitharaman was delivering the second P Parameshwarji Memorial Lecture on "Cooperative Federalism: The Path Towards Atma Nirbhar Bharat," which was organised here in honour of Sangh idealogue P Parameshwaran by Bharatiya Vichara Kendram.

If contingent obligations are increased, subsequent administrations would bear the expense, the union minister warned.

According to the Constitution, the Centre has the ability to consult with and question states about borrowing, but many of them perceive it as an intrusion into their zone of authority, she added.

Sitharaman also recalled that certain states were initially hesitant to take the Centre's money in constructing assets, claiming that if the union government's 50-year interest-free loans were accepted for the purpose, they would be watched.

Noting that they watch everything, she stated that even if the state obtains World Bank help, it will be supervised by the Centre.

When asked if they wanted the budgeted allocation with 50-year interest-free loans for building assets, they responded no since they would be supervised by the Centre.

"Is the Centre Pakistan?" Sitharaman questioned, referring to the poisonous narrative. Under Prime Minister Narendra Modi's leadership, every state gets its fair share, according to the Finance Minister.

"During the epidemic, shortly afterward, and in 2021 and 2022, whenever we have the comfort of some additional cash coming in, I have paid extra instalments to the states far in advance." So they don't run out of money... the data proves that," she adds.

The minister cited the GST Council as a constructive example of cooperative federalism, saying it can demonstrate how good governance can benefit the common people of the country.

The actual benefit of such a GST Council is the federal system and the relationship between the centre and the states, as each state has a voice there.

The Finance Minister also defended the Centre's collection of infrastructure cess, claiming that the money collected in this name is not used for itself, but rather for the construction of roads, highways, large ports, and other infrastructure in the states.

"When money is collected in the guise of infrastructure cess, roads are built everywhere, ports are created everywhere... No state has refused highways, and no state has refused large ports." She bemoaned the spread of a false political narrative that was sabotaging Centre-State relations, and stated that federal connections should be guided by three Cs: cooperation, collectiveness, and coordination.

In a globalised world, the economy must confront the vulnerabilities it faces, and the Centre and the States must collaborate in this regard, she said.

Despite obstacles and problems, the country has raced ahead in areas of growth, surpassing the United Kingdom to take fifth place in the global economic index, according to the Minister.

Observing that cooperative federalism fosters a greater sense of unity in the country, she stated that during the pandemic, states and the Center collaborated to safeguard people's well-being.

According to Sitaraman, the union government looks after everyone's interests through Sabka Saath, Sabka Vikas, Sabka Vishwas, and Sabka Prayas.

If all of the states can carry India together in excellent fiscal health, it will not be difficult for it to reach its aim of becoming a developed nation by 2047, the 100th year of independence, she noted.

V Muraleedharan, Union Minister of State, also attended the ceremony.

(source : PTI)