New Delhi: India is prepared to deal with any situation arising out of global developments, including the US Federal Reserve’s decision to roll back monetary easing, and will not allow the economy to suffer, Finance Minister Nirmala Sitharaman asserted on Sunday.
In a post-Budget interaction with industry body Ficci, she urged corporates to take advantage of the recovery in the economy and step up investment.
“It’s time now for us as Team India to rise. We are at such a juncture where revival of the economy is very clear…this recovery is therefore going to place India as the fastest growing economy among the larger economies and that would continue even in the next fiscal,” the minister said.
Post pandemic, the world order has changed and industry leadership should ensure that India doesn’t miss the bus this time, she said.
Recalling that India missed an opportunity post the global financial crisis, she said the taper tantrum was not absolutely well addressed and as a result, India missed out on one big opportunity that was available at the time.
“Now with the RBI and the government working together and very much keenly observing what is going on in the global financial ecosystem…we have also learnt the lessons of the last crisis which the government of India faced in 2012-13 and 2013-14.
“We are fairly watchful of what is happening as regards the global strategic developments, as regards the Fed decision, and as also regards the global inflationary pressures, we are keeping a very close watch, and I can assure the leadership here that we shall not allow the Indian economy to suffer for want of preparations,” she said.
She exuded confidence that India would definitely leap forward and reach such sustained growth levels and before 2047 it would stand out as one of those well developed, absolutely endowed countries.
The US Federal Reserve has decided to end its bond purchasing programme in March and increase interest rates thereafter to control high inflation. Emerging economies like India have been beneficiaries of increased liquidity and have attracted huge foreign fund inflows.
However, they will face the threat of huge fund outflows as the US Fed will taper off buying of assets.
On meeting the capital expenditure target, Sitharaman said the government expects to meet Rs 5.51 lakh crore by March 2022. She also said the target for the next financial year is very realistic and it will be achieved.
The Finance Minister raised capex by 35.4 per cent for the financial year 2022-23 to Rs 7.5 lakh crore to continue the public investment-led recovery of the pandemic-battered economy.
On the revenue collection, she said the government is working on plugging loopholes and widening the tax base. “I don’t see revenue falling. There can be ups and downs but we are ready to meet contingency,” she said.
With regard to disinvestment, the finance minister said, “selling something of value and not just for the government but I’m sure you in your own businesses don’t very quickly or hastily take the decision to sell things which can require a lot more attention. And in the government, it’s all the more.”
However, she said, things are moving on the disinvestment side.
“The market may be good. And by logic, lots of people may say you should have sold it yesterday. But it’s probably not that way the government works because at the end of the day I am answerable to Parliament, I am answerable to the CAG, the CVC not just the political executives, the permanent executive is very conscious,” she said.
Recalling a few instances, she said, “Let’s not forget some cases have been revived by people seeking justice, whatever, even after 10-15 years of issue being settled. So there is a sense of caution…among the bureaucrats also (there is fear) that nothing should be later found wanting. So they do take extra precautionary care. I would rather go on that route, then push them over to speedily conclude.”
Observing that the target given this time is more realistic, she said, “I would want to achieve it and it’s not an under estimation…we are not giving up (and) we will continue with the disinvestment.”
Talking about the Emergency Credit Line Guarantee Scheme (ECLGS) for the hospitality sector, the finance minister said she will soon hold a meeting with bankers on the issue.
The hospitality and related services especially for MSMEs are yet to regain pre-pandemic level, the finance minister had mentioned in her Budget speech. Considering these aspects, the ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore, she had said.