ET Awards 2019: Government responded in time to developments in September quarter, says Sitharaman

New Delhi: Finance minister Nirmala Sitharaman said the government responded rapidly to concerns raised by industry in the second quarter, although perhaps “not adequately” in some instances. She reiterated that the government would listen to companies and do all it could to put economic expansion back on track. The September quarter saw growth slip to a six-year low of 4.5%.

“But the developments attached with it, things which go into the making of that number, they're all voiced by you (industry), between July and September, so many times frequently to me, and to the various other ministers, that we were able to… respond in time,” Sitharaman said at the Economic Times Awards for Corporate Excellence in Mumbai. “Maybe on many occasions, not really adequately but (the government) did respond in time.”

The government has already indicated its willingness to address sectoral stress.


“We are willing to hear, willing to react, willing to give interventions when necessary,” she said & asked the industry to “feel absolutely free to convey your sense of what is going on so that the government is a responsive government.”

Infra investment
Stating that “it has been a scattered attempt over the three months,” she listed at least 10 of the 36 major steps that the government has taken to boost the economy and spur growth.

The Centre has chalked out a plan for investment of Rs 100 lakh crore in the infrastructure sector over the next five years. Sitharaman said the task is near completion and the government will be able to announce the frontloading of spending in at least 10 major projects before December 15.

Separately, a task force has begun reaching out to companies that want to move out of

China, especially with India having lowered the corporate tax rate to 22% from 30%.
“The last count I came to know was about 12 of them have already been spoken to, their minds understood, their expectation listed out so that the government can come up with a concrete offer for them to shift from where they are now,” she said.

Banks, liquidity
On the issue of liquidity, the minister said it wasn’t a question of fund scarcity. With the Reserve Bank of India at the side of the government, it’s clear that business didn’t have enough access to credit.

Referring to public sector banks disbursing loans worth Rs 2.5 lakh crore in October as part of the outreach programme in 400 districts, she said: “I can see somewhat that that kind of spend has helped in somewhat reviving the consumer spirits and purchases (have) gone up.”

Her statement assumes significance in the wake of private consumption slowing to 5% growth in the September quarter against 9.8% a year earlier, though that’s an improvement over 3.1% in the June quarter this year.

“I also hope that will lead to a lot more improvement in tax collections,” she said.

On the partial credit guarantee (PCG) scheme under which pooled assets of nonbanking finance companies (NBFCs) can be bought over by banks, Sitharaman said “things have been a bit slow”.

Taxation
Emphasising anonymous assessment with respect to direct taxes, the minister assured that tax administrators will not do anything which can be construed as harassment.

She also said that the government is seeking to simplify the goods and services tax (GST) system by rationalising the many slabs even as items of essential use are kept at the lowest rate if not exempted.