Finance Minister Nirmala Sitharaman on Wednesday said subsidies and freebies are to be contextualised. She also said the government is keeping an eye on inflation. These remarks were made during her reply to the debate on Supplementary Demands for Grants (SDG) in the Rajya Sabha.

During the debate, some MPs criticised the Centre for a high additional expenditure of ₹3.25-lakh crore. In her response, Sitharaman said out of the amount, a chunk is to be spent on food and fertiliser subsidies and these are no freebies. “It is important to recognise that when you are transparent in your methods, there is no debate over it (freebies),” she said.

“Subsidies and freebies are to be contextualised. If you are able to put it in your budget and make a provision for it when your revenues come and you give the money, why would anyone have an objection? Education, health and many subsidies given to farmers are fully justified,” the Minister said.

She assured the House that buoyancy in tax collection will help the government in meeting the additional expenditure being sought through the SDG.

Eye on inflation

Commenting on the allegation about failure to check inflation, the FM said the government is keeping an eye on inflation which is purely “extraneous” nowadays because of fuel and fertiliser prices. While the producers’ inflation based on Wholesale Price Index (WPI) dropped to a 21-month low of 5.85 per cent in November, retail inflation based on Consumer Price Index (CPI) was down at 5.9 per cent in the same month. Retail inflation has remained above the Reserve Bank’s tolerance level of 6 per cent since January this year till October.

Sitharaman refuted the Opposition’s arguments that the economy was in trouble. She said major world economies were slipping into recession because of the policies they followed during the Covid crisis when the tendency was to give cash handouts. India followed a targeted approach which revived growth without going into recession.