I’ve done the best for India Inc: FM
MINISTERSPEAK Nirmala Sitharaman defends stimulus package and says will not hesitate to take more steps if needed
nNEW DELHI: The government has taken adequate steps to address the problems of India Inc, Union finance minister Nirmala Sitharaman said in an interview to on Tuesday, defending the stimulus package announced last week. She, however, did not rule out the possibility of taking more steps to support Indian businesses, if needed.
Over five days in the last week, Sitharaman had announced the contours of a ₹20 lakh crore package first announced by Prime Minister Narendra Modi as a measure to fight the economic erosion due to the Covid-19 pandemic and to make the country “self-reliant”. But experts soon pointed out that the additional government spending as a part of the package is limited.
“It is worth remembering that before Covid-19, when we all felt the economy was slowing down and an incentive was needed to be given, the corporate tax rate was cut to an unimaginable extent—it was a drastic step,” Sitharaman said, adding: “It is not as if I have not responded to industry”.
“We showed that we want to give big time help to the industry. Possibly, some green shoots should have been visible by January, by which time companies could have saved enough for making fresh investments; but God willed otherwise.”
The minister also indicated that the government is expecting some lag in recovery due to migrant workers who have returned home during the lockdown. “I am expecting (relatively speaking) a surge in growth but it may be gradual because the labour component is something on which the industry is either remodelling themselves by depending more on local workers, skilling them, or probably waiting for (the return of) those people who have gone home. The surge, from that point of view, may be gradual given the uncertainty related to labour,” she said.
The FM’S announcements last week were part of a slew of measures taken by the government for micro, small and medium enterprises (MSMES), agriculture, migrant workers, defence, businesses, and other segments.
The minister responded to being categorised as a fiscal hawk in her policy, saying: “I am hearing it for the first time. I would assume that is a virtue. I am dealing with public money; I am dealing with every penny for which I am answerable to. I have to be cautious”. She added that she is keeping options open for how the government will fund the stimulus package. “At this stage, it is still difficult for me to say anything. As I said, I have kept all my options open. I have to see where it goes,” she said.
The pandemic is likely to continue to impacting the economy, the minister said, adding that the government will wait and watch to see how things play out. “We are still in lockdown mode. These schemes are getting implemented and people will have some money in their hands again. This may not be the best time to make an assessment,” she said.
“The world is not going to be the same way. When we lift the lockdown, the working environment, the interpersonal contact for business is changing, the world over. Some companies have said working from home could be the norm permanently,” the minister said, explaining why she mentioned that India was entering a new paradigm in a post-covid world.
“I would think one of the big things that have changed, a paradigm shift, is that administration, urban local bodies, wards and panchayats will now have to — I am not speaking on behalf of the government; I will propagate this at any opportunity I get — develop a credible data source of people and their skillsets, the industry engaging them so that if any such situation happens, we can handle them,” she said.