The past few budgets of the federal government own drawn all-spherical praise for bringing transparency and credibility to the numbers. From the cleansing-up of hidden subsidies to enhancing effectivity in expenditure management thru the one nodal account machine, finance secretary TV Somanathan has quietly pushed thru famous adjustments in the model the federal government handles its funds. The jury infamous Somanathan’s contribution in direction of these areas when deciding on him for the ET Policy Trade Agent award.
“There’s no below-the-line item. There’s no EBR (extra-budgetary sources) and borrowing,” talked about one jury member. Further budgetary sources, the oft-criticised segment of the budget that masked the federal government’s precise liabilities, dropped to nil in FY23 from a high of `1.62 lakh crore in FY19.
The budget discontinued the practices of issuing recapitalisation bonds, one other off-budget item, and as a change asked banks to determine on funds from the market on the energy of their steadiness sheets.
Somanathan, a PhD in economics, took over as expenditure secretary in the finance ministry in December 2019, months prior to Covid-19 struck India. He grew to develop into finance secretary in April 2021.
Figuring out capex push as central to the federal government’s toughen for the financial system battered by the pandemic and twinning it with reforms equivalent to the brand new public sector enterprises coverage, Somanathan managed to spearhead serious adjustments at the coverage level.
This integrated an modern push thru additional devoted funds to states for capital expenditure. States were paid grants in attain to speedy launch up spending.
“It is certain an honour to be so chosen, for which I thanks,” Somanathan told ET.
From a carefully negotiated diagram with states to borrow funds from the market to bridge the outlet in Goods and Products and services Tax (GST) compensation cess to a famous kit to toughen beleaguered deepest telecom corporations, he introduced unconventional measures to the desk when the predicament warranted. To push closing-mile reforms, Somanathan ensured that additional borrowing by states develop into once tied to reforms equivalent to in the energy sector, and public meals distribution, along with the one-nation, one-ration card diagram.
When the financial system develop into once accumulated in the grip of the pandemic, the federal government launched the Aatmanirbhar Bharat initiative to foster self-reliance in strategic areas. The initiative has resulted in the Manufacturing-Linked Incentive (PLI) programme to reboot the manufacturing sector. Somanathan has been concerned in the originate of a series of these PLI schemes.
He additionally pushed the foundation of the National Monetisation Pipeline that seeks to leverage sources worth `6 lakh crore over a five-year duration (2021-2026) to originate additional earnings to fund infrastructure pattern. A erroneous bank has additionally been blueprint as much as make certain greater management of non-performing sources as embattled staterun banks were nursed to health. Document credit mutter even as the area financial system struggles demonstrates its success.
Higher expenditure management has helped fund security nets equivalent to the Pradhan Mantri Garib Kalyan Rojgar Abhiyaan or the Pradhan Mantri Garib Kalyan Ann Yojana. Other reforms below his ogle integrated adjustments in procurement principles to originate government contracts clear, and an e-market for purchases.
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