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Tuesday, January 21, 2020

Looking at the economy, intervening where it is needed, says Nirmala Sitharaman

Sitharaman, while addressing a press conference on the state of the economy along with senior Finance Ministry and Corporate Affairs Ministry officials, declined to comment on the narrative of stagflation — slow growth, rising unemployment coupled with high inflation.

By: ENS Economic Bureau | New Delhi | Updated: December 14, 2019 7:15:36 am
Nirmala Sitharaman, sitharaman on economy slowdown, indian economy slowdown, Nirmala Sitharaman on gst compensation, finance minister on indian economy, indian express Finance Minister Nirmala Sitharaman and Revenue Secretary Ajay Bhushan Pandey at a press conference in
New Delhi on Friday. (Express photo by Anil Sharma)

The government is monitoring the economic situation and will take measures for the sectors that require intervention, Finance Minister Nirmala Sitharaman said Friday. She also said the Centre is aware of the pending GST compensation to states and will honour its commitment, adding that her team has not discussed any hike in GST rates yet.

Asked about by when does she expect the economy to revive, she said: “I’m not engaging in any prediction based thing. I am looking at the economy, where I need to intervene, I am intervening and I shall continue to address the problem of the industry as and when it rises.” Sitharaman, while addressing a press conference on the state of the economy along with senior Finance Ministry and Corporate Affairs Ministry officials, declined to comment on the narrative of stagflation — slow growth, rising unemployment coupled with high inflation. “No comment on that. I have heard it. Stagflation is a narrative which is going on. I am hearing it,” she said.

On the talks of a hike in GST rates, Sitharaman said her team has not discussed it. “The buzz is everywhere other than my office. I don’t know where this is coming from. I have not been to GST Council yet. So whether it’s going to request them for a hike or ask them to review, nothing have I spoken among ourselves. We have not had any conversation yet. But it’s good to see all this churning outside, it helps to clarify our thought processes,” she said.

When asked if the option of rate hikes is not on the table, she said, “No, no, I am not even saying that. I am saying we as a team have not spoken yet on what we want to go to the GST Council with, so it’s good that so much of thought is having its own churn outside, helps me to understand how the mindsets work, we have not taken a call, the buzz is everywhere else.”

On the rising onion prices, the Finance Minister said prices in some places are coming down with imports of the commodity. With fresh crop coming in the market, the prices will further decline, she said, adding a Group of Ministers is regularly reviewing onion prices.

The Rs 25,000-crore fund being set up to kickstart stuck real estate projects has found traction from 13 domestic financial institutions including HDFC, State Bank of India and LIC, Chief Economic Adviser Krishnamurthy Subramanian said Friday. “Fund is fully operational and investment committee is completing due diligence on the first set of deals today,” he said making a presentation titled Major Interventions to Boost the Economy. The fund has executed legal documentation for Rs 10,530 crore.

Last month, the Finance Minister announced the creation of a special window to provide last-mile funding for stressed housing projects. While the commitment of funds to be infused by the Centre in the affordable and middle-income group housing sector via the special window was set at Rs 10,000 crore, the fund had planned to seek matching contributions from banks and others to generate a corpus of about Rs 25,000 crore. Subramanian said the Fund is doing due diligence of projects in record time of six to eight weeks as against six to eight months usually.

Highlighting other measures, he said 32 Central Public Sector Enterprises have cleared more than 60 per cent of their dues worth Rs 61,000 crore in last two months in order to inject liquidity into the economy.

Of the 32 CPSEs, 21 have set up online bill tracking systems to reduce pendency in bill payment and reduce accounts payables of permanently, and presently only Rs 4,877 crore of their dues are pending, he said. Recounting steps taken in recent months, he said the government has also taken a series of measures to deepen and widen the corporate bond, government securities and equities market.

He said the government has infused Rs 60,314 crore of equity into public sector banks in the current year, enabling them to disburse Rs 4.9 lakh crore worth of loans.

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