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Thursday, March 04, 2021

FM underlines role of pvt sector; says bending Covid curve, Budget will help sustain revival

The Budget, Finance Minister Nirmala Sitharaman said, had a blend of stimulus measures and reforms aimed at putting the economy on a steady growth path in the years to come.

By: ENS Economic Bureau | New Delhi |
February 14, 2021 4:40:19 am
FM Nirmala Sitharaman, private sector, Budget, economy revival, Covid curve, Parliament debate, Indian express newsFinance Minister Nirmala Sitharaman arrives at Parliament House for the debate in the Lok Sabha over the Budget, on Saturday. (Photo: PTI)

PURSUING WITH the process of consensus building on politically difficult reforms such as privatisation, Finance Minister Nirmala Sitharaman Friday said the BJP government has laid out well-thought-out reforms to support Indian entrepreneurs, wealth creators and MSMEs while respecting honest taxpayers and citizens.

The Budget, she said, had a blend of stimulus measures and reforms aimed at putting the economy on a steady growth path in the years to come. With Prime Minister Narendra Modi emphasising the importance of the private sector in creating wealth and generating jobs two days ago in the Lok Sabha, she underscored the importance of private enterprises and said that “unless wealth creators create wealth”, there will be nothing to distribute in the economy.

Defending the government’s economic management during her reply to the debate on Budget, Sitharaman said, “We have managed to bend the (Covid) curve and as a result the revival of the economy looks a lot more sustainable and this Budget, therefore, gives the necessary impetus. The challenging situation of the pandemic did not deter us from taking up reforms which are going to be necessary for sustaining long-term growth for this country. We made many announcements and in the Budget have kept pace with other reforms.”

With the Opposition attacking the government on privatisation and alleging its policies benefited a couple of business houses, Prime Minister Modi had said that if the public sector was necessary for India, so was the private sector. Citing the example of private players in pharma and vaccine manufacturing, he said, “If India has been able to help mankind, it is also because of the role of the private sector… To call them dishonest, or use bad language against them, this culture may have got votes in the past, but will not help anymore… please don’t do that.”

“Wealth creators are important for India, only then can wealth be distributed, and jobs be generated… Just because someone has become an IAS officer, can he/ she run chemical and fertiliser factories, and airlines? What kind of power have we given to the babus? What will we achieve by handing over the nation to babus?” the Prime Minister had said.

Sitharaman continued with this theme and said the Congress party ushered in “reforms under duress” only in 1991, whereas the BJP’s belief in the Indian economy and private enterprise had been consistent. “In the economic history of India, it is important to trace this route since 1948 when we with great adoration adopted socialistic policies. With great adoration, nationalised institutions, and with great adoration, had a kind of a blend of Indian hybrid socialism and a certain kind of licence quota raj. All of which started denigrating Indian businesses, all of which made businesses absolutely difficult to perform, constricted our enterprises, particularly the small and medium ones… too many questions, too many licences, ended stifling these businesses,” she said.

Defending the disinvestment in the PSE (Public Sector Enterprises) policy unveiled by the government, Sitharaman said it does not allow for any kind of “elementary or rudimentary approach to it”. Instead it clearly states the path forward, she said. The Budget has estimated divestment receipts at Rs 1.75 lakh crore in 2021-22, and announced strategic sale of two public sector banks, one insurance company apart from listing of LIC.

While promoting entrepreneurship, the Budget has provided support to Micro, Small and Medium Enterprises and raised spending on health, water and sanitation, the Finance Minister said. Pointing to the increased spending by the government for MGNREGA last year due to the pandemic, she said the government will spend more for the scheme if needed.

Amid ongoing protests by farmers, she said that not even one Agricultural Produce Market Committee (APMC) mandi has been shut in any state, and in fact money collected through the farm cess will be used to improve the APMC infrastructure. “Prove even if one APMC mandi was shut. Not even one was shut… In the budget there has been provision that Rs 30,000 crores will be collected through agricultural development infrastructure cess, and will be going actually to states so that APMC infrastructure can be improved. We are also giving funds to states to improve APMC infrastructure,” she said.

Elaborating on her party’s economic philosophy, Sitharaman said, “I like to put before the House that since Jan Sangh days, respecting Indian entrepreneurial skills, Indian managerial skills, Indian trade skills, Indian business skills, Indian youth, Jan Sangh onwards, BJP has consistently believed in India. We did not borrow from somewhere and give a hybrid. We never borrowed. At one point of time, because we are close to Russia, we’ll do one thing, which is a very command controlled regime, the centralised planning regime and then suddenly we think even China is moving in that route of supporting capitalism so therefore we’ll also have to do it. No, Sir, our belief in India, in Indian businesses and in Indian economic strength has been consistent from Jan Sangh to now BJP, going in a steady line of belief in Indian enterprises, giving them the maximum freedom, giving them the maximum respect that they so deserve,” she said.

She said the government has been working to help street vendors, MSMEs and small businesses. The PM-SVANidhi scheme is supporting street vendors through Rs 10,000 each working capital loans. “They (street vendors) aren’t anyone’s cronies,” she said. On allocations to the health sector, Sitharaman said water and sanitation has been brought under the health category for taking a holistic approach towards health and wellbeing. Despite this the allocation to core heath has not come down, on the contrary, it has gone up, she said.

During the pandemic, to support vulnerable sections of society and to provide relief to people, the government had announced measures which were “tailor made” to suit our needs, rather than following the advice of copying what countries were doing, she said. To help MSMEs, the Insolvency and Bankruptcy Code (IBC) provisions were suspended and the government also extended working capital to them without any security, she said.

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