Finance Minister Nirmala Sitharaman on Thursday said that the government is doing everything required in order to support the economy, and urged industry leaders to step up investments and build capacity in the domestic chip manufacturing and renewable energy segment.
The government is pursuing key economic reforms, and doing “rigorous work” to achieve the privatisation plan outlined in the Budget and hope to complete strategic sale of Air India, BPCL, among others, within this fiscal year, she stressed.
Speaking at the CII annual session through a video link, she said the four engines of economic growth — net exports, government expenditure, consumption and investment — are starting to work well to aid the recovery process. The economy is buoyant, in terms of the buoyancy to be seen during recovery-time. “Government is committed to doing everything that it is required to be done for the economy,” she said.
“Growth will have its priority, growth will be given importance and growth will be pushed both by the Reserve Bank and by the government,” she said. While the central bank will take measures to contain inflation, growth is what will make all the difference to economic revival, she said. The minister indicated that the RBI will continue to maintain its accommodative and growth supportive policy. “I am glad that the RBI has been voicing that understanding that too quick a retrieval or sucking out of liquidity from the economy may not be the necessary stimulus that is required and have not given any indication of sucking out the liquidity that is available,” she said, adding that the government and RBI has been working in close coordination.
Exports of steel and many others have grown recently, while the Centre has stepped up infrastructure investments. Consumption also has been given the necessary push through various government policies, she argued.
She said the nature of investments has changed, with citizens now more open to invest in the stock markets. It’s the best time for Corporate India to step up risk taking as corporate tax rate has been among the lowest, and there is an opportunity to build capacity for domestic chip manufacturing and in the renewable energy field, she added. Foreign direct investment has been “flowing into India non-stop” due to the belief in sound macroeconomic fundamentals, she said, adding the government was always in agreement with industry on retrospective tax, and once the arbitration verdicts came out, the government was ready with the necessary legal changes to end retrospective tax.