‘We are bringing in the same Insurance Bill, yet the Congress is making an issue of it’
By easing norms for FDI in defence sector and railway government hopes will help save on foreign exchange.
Easing the norms for foreign direct investment (FDI) in the defence sector and railway infrastructure is a step that the government hopes will help save on foreign exchange and boost manufacturing to spur growth in the broader economy. The move will also help in creating jobs, Nirmala Sitharaman, minister of state for commerce and industry (independent charge) and minister of state for finance and corporate affairs, tells Shruti Srivastava in an interaction. Excerpts:
The Cabinet has cleared foreign direct investment cap hike in defence and railway infrastructure. What other sectors are you looking at?
It was announced in the Budget. In the defence sector, where 49 per cent FDI is allowed, they will be areas which are not going to hurt our defence preparedness. Once implemented, it will cut down the foreign exchange bill, create jobs and due to technology transfer, we can slowly master the technique and may start exporting it. You can improve on it and wean away from importing defence equipment. Though construction was also mentioned in the Budget, we could not take it up. We will go forward with it now.
The Congress has raised concerns over the composite cap issue in the insurance sector. How valid are the concerns?
The finance minister said this on the floor of Parliament. There was a time when the BJP brought it, and the Congress opposed. Then when the Congress brought it, the BJP opposed. In a way, scores are settled. When the standing committee headed by Yashwant Sinha, a senior BJP person, gave recommendations, 11 were accepted straight away. Now with those amendments, may be additional four amendments which are not going to effect the core aspect of the (Insurance) Bill, how is it justified for the Congress to raise the issue?
It is the same Bill on which the Standing Committee gave its input, you (Congress) gave input, you incorporated the amendments and said you were ready to table it in Parliament. Now we do the same thing with the same material and you are opposing it?
I have a feeling they do not have political issues, they don’t have issues which are required to be taken up by an Opposition party for the sake of the people, they are unable to find any fault of the government so they are making an issue of something which is not an issue.
Do you think this is in view of the Prime Minister’s visit to the US?
You may say that. They don’t want to create a positive environment within India for the PM’s visit to the US. I believe that there is substance in this argument.
Will the issue of the ongoing investigation against India’s trade policy and IPR regime be taken up during the PM’s visit?
Yes, that issue was raised by me in Sydney when I met US Trade Representative Michael Froman. Unfortunately, when we met, their interest was to talk to us on WTO issues. But issues of this nature will definitely be raised by us. The totalisation agreement, the issue of Special 301 will certainly be raised.
With the aim of reviving Special Economic Zones, are you looking at doing away with the taxation imposed on them?
Not just taxation, there are several other issues which have been discouraging SEZs from expanding. Issues like privileges are being given to exporters but not to manufacturers. So, there are many issues related to manufacturing which are having a bearing on success of SEZs. We are trying to understand that complexity. This government’s focus is on promoting exports. We have taken steps to ensure that hurdles for manufacturing are removed, domestic markets benefits from increased production both in terms of availability of goods and also in terms of greater money circulation.
But there is also a feeling that some key reforms could have been undertaken because you have the numbers.
Just having the numbers is not important. They are important when you have to pass a law. But on issues where you have to address concerns of people, numbers don’t help. You have to make sure people are coming to support it. The view of this government is not to bulldoze, but to take everybody on board. First of all we have to clear the muck left behind the previous government. Much before the clearing has happened, people are saying where are you, come with a jaadoo ki chadi (magic wand).
How do you plan to build consensus on GST when even BJP-ruled states are opposing it?
During Budget, the FM spent a lot of time on GST. The points of differences now have largely been addressed. We have assured them that injustice will not be done but some kind of uniformity has to be laid down. It is more of taking each other into confidence, sitting and addressing their issues. Constitution Amendment Bill should be there by end of this year.
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