Fiscal steps taken by govt led to positive growth in Q3: Fin Min
Economy is estimated to contract by 8% during 2020-21 due to impact of pandemic
NEW DELHI: Finance Minister Nirmala Sitharaman on Monday said the fiscal measures taken by the government have resulted in positive growth of 0.4 per cent in the third quarter of the current financial year.
The economy is estimated to contract by 8 per cent during 2020-21 due to the impact of the COVID-19 pandemic. “The fiscal measures taken by Government during 2020-21 have been calibrated to sustain high spending in the economy and assist in its V-shaped recovery, resulting in a positive GDP growth of 0.4 per cent in third quarter of FY 2020-21,” she said in a written reply in the Lok Sabha.
The minister further said that the gradual unlocking of the economy has eased supply-side disruptions enabling inflation to decline from 7.6 per cent in October, 2020 to 4.1 per cent in January 2021, mainly on account of decline in food inflation.
“Lower inflation has increased the real purchasing power of the people leaving more money in their hands to spend,” she added.
Sitharaman said that the money to spend has further increased under PMGKY and ANB packages through direct benefit and in-kind (food; cooking gas) transfers, emergency credit to small businesses and wage increase for MGNREGA workers, among others.
With regard to lockdown, the minister said the government imposed a strict 21-days nationwide lockdown from March 25, 2020, to contain the spread of COVID-19 and ramp up the health infrastructure with a view to saving lives.
“Astute management of the lockdown and subsequent unlocking along with strengthened health infrastructure was accompanied by roll out of Pradhan Mantri Garib Kalyan Yojana (PMGKY) and Atmanirbhar Bharat (ANB) packages that besides saving lives also protected livelihoods and businesses. These measures, amounting to Rs 29.87 lakh crores - equivalent to 15 per cent of India’s GDP, have boosted consumer confidence as their implementation advanced through 2020-21,” she said.
The Consumer Confidence Survey, January 2021, of Reserve Bank of India shows that consumer confidence has beencreasing since May 2020 in respect of future expectations and since September, 2020 in respect of current expectations, she added.
Replying to another question, Sitharaman said, the Cabinet Committee of Economic Affairs (CCEA), in its meeting held on January 27, 2021 has accorded ‘in-principle’ approval for 100 per cent disinvestment of Government of India (GOI) shareholding in RINL also called Visakhapatnam Steel Plant or Vizag Steel along with RINL’s stake in its subsidiaries/ Joint Ventures through strategic disinvestment by way of privatisation.
While deciding the terms and conditions of the strategic sale, she said, legitimate concerns of the existing employees and other stakeholders are suitably addressed through appropriate provisions made in the Share Purchase Agreement (SPA). “The State Government does not have any equity in Rashtriya Ispat Nigam Limited (RINL). However, the State Government is consulted in specific matters as and when needed and their support is also solicited in the matters that require their intervention,” she said.
Strategic disinvestment of Government of India’s equity will lead to infusion of capital for optimum utilisation, expansion of capacity, infusion of technology and better management practices, she added.