New Delhi: The Indian government is open to taking more measures in the future to support economic recovery, Finance Minister Nirmala Sitharaman said Tuesday.
Speaking at a virtual session organised by the US-India Business Council, Sitharaman said high frequency indicators such as power consumption and toll collections are showing that there are green shoots in the economy. But, she did not rule out more interventions.
“It is not as if we have concluded that the economy is showing green shoots and we won’t take any more steps. We will keep all necessary options absolutely open. The government is willing to talk to everybody and see what best has to be done. Interventions can happen in the future depending on how industry responds,” she said.
The Indian government and the Reserve Bank of India have so far announced a total economic package of over Rs 21 lakh crore, majority of which has been in the form of liquidity support through easier credit access for firms. But firms have been asking for direct cash support and tax breaks to revive their businesses adversely hit by the pandemic.
Sitharaman expressed confidence about economic revival especially in rural areas.
Citing a good rabi crop harvest and positive estimates about the kharif crops, as well as other data like higher tractor sales, Sitharaman said, “Agricultural sector is driving the economic revival.”
Most economists and financial institutions have forecast that the Indian economy will contract 5-12 per cent in 2020-21 as a two-month lockdown to combat the pandemic brought economic activity to a complete halt in the months of April and May.
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Govt, RBI worked in sync
The finance minister also stressed that better coordination and synchronization between the government, regulators, financial sector will help in strong recovery.
Sitharaman cited how the Reserve Bank of India and the ministry of finance have worked in sync with each other and added that the government’s economic package has had resonance on the ground, especially among micro, small and medium enterprises.
“I hope that the Indian industry together with the government will ensure a good, speedy and sustainable recovery post the pandemic,” Sitharaman said.
Sitharaman also reiterated the government’s intent to completely exit non-strategic sectors.
“There is no sector, which is reserved for the public sector alone. Everything is open to the private sector. Public sector undertakings will be present only in predetermined strategic sectors and even in sectors that are strategic, not more than 4 PSUs will exist, and the private sector will be allowed promoting competition,” she said.
Sectors like defence, banking and railways are expected to be classified as strategic sectors by the government in the coming weeks.
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