The rich are getting richer, but the poor are not getting poorer : T.V.SOMANATHAN
Outlook Business|March 2024
Increasing consumption among the middle class and the poor in India is a valid policy challenge, the answer to which lies in creating more jobs, says T.V. Somanathan, finance secretary and secretary of expenditure in the Union Ministry of Finance. In an exclusive interview, he also discusses why the current income tax rates are reasonable and why he finds the 3% fiscal deficit target questionable among other issues.Edited excerpts: 
The rich are getting richer, but the poor are not getting poorer : T.V.SOMANATHAN
 

Private investments have only recently picked up. Do you think the fiscal deficit target of 4.5% can be achieved without a significant rise in private sector expenditure?

First, I think the current growth momentum can be sustained even at a slightly lower fiscal deficit, because I do not see the absolute amount of capital expenditure declining from present levels. That is 10% revised to 9.5% for the current year and 11.1% in the next year. 

I do not think that the consolidation will come at the expense of reducing that. It will come partly through increased revenue, increased denominator in the GDP [gross domestic product] and perhaps through some compression of other expenditure as a proportion of GDP. So, I do not think that we will be seeing any reduction in the levels of capital expenditure. What private capital expenditure can do, if it increases, is to push up the rate of growth.  

Do you think that if this government returns to power, it would be able to achieve the Fiscal Responsibility and Budget Management (FRBM) target? 

I am not speaking on behalf of the government because it is a speculative thing. What I believe is that the whole philosophy perhaps needs to be revisited. I think the old philosophy of a fixed 3% target as a permanent fixed objective is questionable. 

Esta historia es de la edición March 2024 de Outlook Business.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

Esta historia es de la edición March 2024 de Outlook Business.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

MÁS HISTORIAS DE OUTLOOK BUSINESSVer todo
The New Imperialism
Outlook Business

The New Imperialism

The EU has approved a new environmental regulation that will impact global value chains. Small businesses will have to bear the brunt

time-read
5 minutos  |
October 2024
VISION FOR THE INDIA OF 2047
Outlook Business

VISION FOR THE INDIA OF 2047

In India@100, Krishnamurthy Subramanian argues that India can be a 55trn economy by 2047 if it doubles down on the economic policies implemented in the last decade to grow at 8% annually. Although middle-income trap has plagued many developing countries in the past, he is convinced that India is well-equipped to avoid obstacles in its growth odyssey

time-read
3 minutos  |
October 2024
BUSINESS MINT: CELEBRATING EXCELLENCE, ONE AWARD AT A TIME
Outlook Business

BUSINESS MINT: CELEBRATING EXCELLENCE, ONE AWARD AT A TIME

Ensuring that Firms and Entrepreneurs Receive the Recognition they Deserve since 2018

time-read
3 minutos  |
October 2024
DR. PAVANI KADIYALA: DRIVING INNOVATION AND TECHNOLOGICAL ADVANCEMENT IN EMERGING INDUSTRIES
Outlook Business

DR. PAVANI KADIYALA: DRIVING INNOVATION AND TECHNOLOGICAL ADVANCEMENT IN EMERGING INDUSTRIES

Celebrating Dr. Pavani Kadiyala's Accolades and Contributions to Emerging Technologies

time-read
2 minutos  |
October 2024
INSPIRING EXCELLENCE: THE JOURNEY OF NALANDA EDUCATIONAL INSTITUTIONS:
Outlook Business

INSPIRING EXCELLENCE: THE JOURNEY OF NALANDA EDUCATIONAL INSTITUTIONS:

Honoring the Vision of Sri Manthena Suryanarayana Raju Through Innovation and Holistic Development

time-read
2 minutos  |
October 2024
THE RISE OF VARUN REALTORS
Outlook Business

THE RISE OF VARUN REALTORS

Leading the Charge: Varun Kaliga Named Emerging Real Estate Influencer of the Year for Innovative Impact

time-read
2 minutos  |
October 2024
R.C. RATUL: BRIDGING THE WORLDS OF ENTERTAINMENT AND REAL ESTATE
Outlook Business

R.C. RATUL: BRIDGING THE WORLDS OF ENTERTAINMENT AND REAL ESTATE

The Visionary Behind the Convergence of Entertainment and Real Estate

time-read
2 minutos  |
October 2024
CYBERABAD BUILDERS ASSOCIATION: LEADING THE CHARGE IN SHAPING
Outlook Business

CYBERABAD BUILDERS ASSOCIATION: LEADING THE CHARGE IN SHAPING

Recognized as the Emerging Builders Association of the Year 2024,’ CBA is setting new benchmarks in real estate and construction excellence in the heart of Hyderabad.

time-read
2 minutos  |
October 2024
FROM PAPERBOY TO POWERHOUSE: THE INSPIRATIONAL JOURNEY OF VENU KALYAN
Outlook Business

FROM PAPERBOY TO POWERHOUSE: THE INSPIRATIONAL JOURNEY OF VENU KALYAN

Celebrated with the Most Admired Real Estate Sales Coach of the Year 2024’ Award for Transformative Impact and Innovative Coaching

time-read
2 minutos  |
October 2024
OUTLINE MEDIA: SHAPING TOMORROW'S BRANDING AND ADVERTISING TODAY
Outlook Business

OUTLINE MEDIA: SHAPING TOMORROW'S BRANDING AND ADVERTISING TODAY

Redefining Branding and Advertising

time-read
2 minutos  |
October 2024