New Delhi, Feb 13 (UNI) Reiterating that sectoral allocation and effective capital expenditure have gone up in the Budget 2025-26, Union Finance Minister Nirmala Sitharaman on Thursday said that government will continue to take steps to reduce the burden of price rise, while also dismissing the concerns around depreciation of Indian Rupee (INR) against US dollar.
Replying to the general discussion on the Budget in Rajya Sabha, Sitharaman said that while there is no sectoral cut in allocation for the fiscal 2025-26, the effective capital expenditure has gone up.
The Finance Minister said that in the Budget 2025-26, the effective capital expenditure is projected at Rs 15.48 lakh crore as against Rs 13.18 lakh crore in the Revised Estimate of 2024-25.
“So, there is just no reduction in capital expenditure,” she said during her two-hour long reply in the Upper House.
“If we take this together with what is done by the public enterprises. ..they are independent of the Budget as they do their own but also account for the capital expenditure. If we were to take that also on board, for the year 2025-26 the capital outlay which I would define as effective capital expenditure is likely to be in the range of Rs 19.80 lakh crores,” the Minister highlighted.
On concerns raised by the Opposition members over weakening rupee, Sitharaman said that Indian Rupee (INR) like other Asian currencies depreciated against the US dollar on account of uncertainty pervading the global macro economy.
“US dollar index rose 6.5% during October 21, 2024 to January 27, 2025. Major Asian currencies such as South Korean Won, Indonesian Rupiah, Malaysian Ringgit depreciated by 8.1%, 6.4% and 5.9% respectively. G-10 currencies also depreciated during this period by more than 5.5%. For instance, Japanese Yen, British Pound and Euro depreciated by 7.0%, 6.6% and 5.8% respectively,” she said.
“So, we believe that overvalued currencies erode national competitiveness as exports become expensive, and domestic companies will have to be given support. So, I would like to allay the concerns or apprehensions of the Hon’ble members on account of INR (Indian Rupee) fluctuation. The Government and RBI will continue to exercise necessary vigil. RBI’s efforts in making sure the Indian Rupee stabilizes are several,” the Finance Minister further said.
Responding to questions raised by former Finance Minister and senior Congress leader P Chidambaram over assessment of revenue foregone on account of income tax relief, Sitharaman said that revenue buoyancy numbers given in the Budget are realistic.
On the argument that income tax relief also benefits the rich and super rich, the Minister explained as to how the gains to those earning very high income are much less compared to those having annual income upto Rs 12 lakh.
Budget 2025-26 presented in Lok Sabha on February 1, 2025 provides for nil tax for individuals earning upto Rs 12 lakh a year. The direct tax relief given to taxpayers is estimated to result in the Centre foregoing Rs 1 lakh crore.
She also highlighted the steps taken by the government to ease the burden of price rise for ordinary citizens.
“Government’s attempt to remove the stress of price rise is actually being received on the ground. The efforts will continue. We shall make sure that price should not be a burden on the ordinary citizens. We shall support this subsidized (Bharat) atta, wheat, rice and chana dal and so on,” Sitharaman said.
The Minister also highlighted that the transfer to states is projected to go up in the financial year 2025-26.
“The total allocation transferred to the states in 2025-26 is Rs 25.01 lakh crore which shows an increase of 4.92 lakh crore over the actual of 2023-24,” she said.
More than 90 members participated in the discussion on Budget in the Rajya Sabha.
In the early part of her reply, Sitharaman noted that Budget 2025-26 has been made during a very difficult time.
“The challenges, particularly external challenges, are very, very severe, most of which are beyond even any projections (or) predictions. There are no models that you can build and understand how the trends will be because they are very dynamic and changing by the day,” she said.
After the Minister’s reply, the House was adjourned to meet at 11 AM on March 10, 2025.
