KEY THINGS FM SAID

The narrative has changed. During UPA, nobody spoke of Indian economy as a bright spot. The entire debate now is that will India miss its rank of fastest growing economy by 0.1%. IMF said that in the next two years, India (is) to be fastest among global economies.

PM now aims that India’s ranking in the Ease of Doing Business should be among the first 50 countries. Enforceability of land and municipal contracts needs to improve. This will have to take place between the Centre and the state. There has been lack of policies in the past. I can’t recall a single structural reform which has been done during Congress rule. Demonetisation, GST, LTCG were difficult decisions but this is the difference between the UPA and the NDA. We know how to bite the bullet. When we came to power fiscal deficit was 4.5 %. This year it’s (fiscal deficit) a statistical difference. We have observed fiscal discipline in last 4 years and will continue to do so. When we brought the 28% slab in GST, you felt it’s too high. But this was for commodities in which you imposed cumulative duty of 31%. You said cap it at 18%. But it would have been wrong. Remember India has a large BPL (below the poverty line) population. Singapore sells both food and Mercedes at 7%. When GST was imposed, people stopped manufacturing in the previous quarter and sold away old stock. We are now seeing personal income tax base increasing. Countries have taken years to stabilise GST. Every state knows it is in their larger interest. Strategic sector will remain with government. But for those in non-strategic sectors, we should ask ourselves, should we be spending on loss-making business? With 15% market share (Air India’s) debt is 58,000 crore. Even if a fraction of that amount is spent on Andhra Pradesh, it would have brought smiles on the people of Andhra Pradesh.

Markets fell for global reasons. The government lost ₹3.67 lakh crore under this head. But it will not hurt middle class investors.