NEW DELHI, August 26: The Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman has stressed that structural reforms were a key priority of the government as had been reflected in the slew of measures & policies announced since outbreak of COVID-19. “Every policy which was introduced had a structural component. Consequently, the reforms are having significant impact on the recovery process which we are currently witnessing,” she claimed.
Addressing the captains of the Indian Industry on Wednesday, she said in order to facilitate the recovery process the Home Ministry had given out directions to the state governments for imposing no curbs on the movement of people and inter-state movement of goods & services. “There cannot be better time for exemplar cooperation between government, regulators and industry to ensure that India comes out from the present crisis”, she added.
Taking cognizance of the fact that many sectors such as Tourism, Hotels & Hospitality, Real Estate & Construction and Airlines have been disproportionately affected by the pandemic, the Finance Minister said these were critical sectors with significant multiplier impact on the economy. In order to ease the pain of few of these ailing sectors, the Standard Operating Procedures (SoPs) for the hotels, banquets & related activities would be looked into, she assured. On the issue of strategic disinvestment, Sitharaman highlighted that there was a need to move fast on cabinet cleared disinvestment decisions.
Regarding the private investment cycle which got a fillip from the corporate tax cut in September 2019, investments however couldn’t take off due to outbreak of COVID-19. Sitharaman was of the view that in a post-COVID world, these should fructify. “With post-COVID reset happening, emphasis has to be on adoption of data-driven manufacturing models through ploughing greater investments in these models”, she further added.
On the issue of local manufacturing, Sitharaman said Productivity Linked Incentives (PLIs) scheme had met with excellent response and had helped speed up manufacturing of critical bulk drugs and APIs in six states.
About delayed payments by the government agencies, it was stated that the Finance Ministry was taking periodic reviews to expedite the due payments to the industry. The Finance Minister alluded that since infrastructure sector played a key role in speeding up growth momentum requiring its financing to be given a further boost, external funds would also be welcomed. Responding to a question about the need for lowering GST rates on two-wheelers, she assured that this was indeed a good suggestion as this category was neither a luxury nor a sin good and hence merits a rate revision. Consequently, this would be taken up with the GST Council, she added.
Mr Uday Kotak, President, CII, in his opening remarks, said. “we are witnessing ample signs of a nascent recovery from the lows seen in April-May as a result of the supportive steps taken by both the Central Government and RBI. However, the localized lockdowns implemented in many States has given rise to supply-side bottlenecks, which could impede growth when demand side cranks up.” He further added that government-owned institutions like NABARD, SIDBI and NIIF had the potential to evolve into development finance corporations in order to support recovery.
Mr Chandrajit Banerjee, Director General, CII in his welcome remarks highlighted the continual support from the government in assisting the industry to navigate through the difficult times.
(Manas Dasgupta)
