The government is an active participant in the recovery process and remains committed to reforms as is evident from a series of tangible steps taken by it in recent times. This includes the clearing of 7 critical bills of Ministry of Finance & Corporate Affairs during the current monsoon session, firm commitment towards disinvestment and privatization, working in partnership with the RBI, encouraging non-bank financing and using technology to improve tax buoyancy. This was stated by Smt Nirmala Sitharaman, Minister of Finance and Corporate Affairs, during the session on India@75: Government and Business working Together towards AatmaNirbhar Bharat at CII Annual Meeting 2021 held today. Importantly, due to the significant buoyancy seen in both indirect and direct taxes so far, supplemented by the likelihood of impressive disinvestment receipts this year, the government will honor GST compensation payments to the states this year, she added.
Apart from recovery, ensuring growth sustainability is also the key credo being followed by the government. This is mirrored by the key factor market reforms implemented in the form of passing the four labour codes, reinvigorating the asset monetization programme and concerted focus on disinvestments. On disinvestment, Hon’ble Minister opined that government remains committed to achieving the disinvestment target this year, with the recently passed PSE policy being a game-changer in heralding changes on the privatization front in the future.
However, aside from setting in motion the recovery process, from a medium-term perspective, Hon’ble Minister emphasized that she would like to see India move ahead in the direction of Atmanibharta or self-sufficiency in a few sectors such as energy. She encouraged private players in building capacity to help the country become Atmanirbhar in renewable energy in order to reduce the country’s dependence on fossil fuels. “Reliance on renewable energy should be such that we are able to produce locally equipment that is needed to generate renewable energy,” Smt Sitharaman added.
“The Indian economy has benefited from the collective participation, thinking, and coordination of efforts of all the stakeholders. I thank the Indian industry for being level-headed while facing the challenges during the 1st and 2nd Covid waves”, said Smt Sitharaman. On the back of large public sector spending, all sectors of the economy have staged impressive recovery trajectory. The government spending has flowed largely into the infrastructure sector, with infrastructure investment being currently at its highest ever in history, she stressed.
The strong macro-economic fundamentals of the economy are being reflected in the record high levels of FDI and forex reserves which the economy is currently witnessing. In the first five months of FY22, the FDI flows were 37% more than the same period last year, while the forex reserves stood at US$620 billion as of July. The messages and indications which are coming are very clear that the economy is revving to come out,” Smt Sitharaman added. The financing needs of the growing economy have been successfully met by the over Rs 5 lakh crores of capital being put in the hands of the various stakeholders through various credit outreach programmes of the government.
“Indian industry is moving into totally new areas. It is time for the Indian Industry to come around in a big way and it is time to show its risk-taking capacity”, alluded Smt Sitharaman. The government is always very receptive to hearing new ideas and suggestions from the industry. COVID has not been financed by taxation of businesses, we strive to maintain the highest level of transparency in all aspects of governance, she added.
On growth, the Finance Minister stated that though growth will be given priority by both the government and RBI, containment of inflation within the targeted levels through host of supply-side initiatives will be accorded importance as well.
Mr Uday Kotak, Immediate Past President, CII, in his opening remarks, highlighted that “we are seeing the economy coming back into its stride. The month of July showed the first signs of vibrancy with on-ground activity showing optimism as well on the back of supportive steps taken by both the Central Government and RBI”. Responding to Smt Sitharaman’s clarion call, Mr Kotak added that the time has indeed come for the Indian industry to increase its risk-taking capacity and revive animal spirits.
12 August 2021