With the new government’s first full Budget a little over a month away, Union Finance & Corporate Affairs Minister Nirmala Sitharaman will have to hit the ground running to prepare a roadmap for arresting the slowdown in the economy and reviving the financial sector. The government will present the Union Budget on July 5 and Economic Survey on July 4.
As she took charge of the ministry on Friday, latest government data revealed that economic growth in January-March quarter tumbled to a five-year low of 5.8 per cent and unemployment rate rose to 45-year high of 6.1 per cent in 2017-18. Sitharaman would draw upon her experience of serving the previous Narendra Modi government, as a Minister of State for Finance, then Corporate Affairs and later as a Minister of State (Independent charge) for Commerce and Industry. The full Budget will spell out priorities of the government and likely push the direct tax relief provided in the last interim Budget.
Before taking charge of the ministry on Friday, she met her predecessor and mentor Arun Jaitley, who had opted out of the second term of the Modi government on health grounds.
Apart from the government focus on boosting farmers’ incomes through policy measures, the Budget will look at ways to attract foreign investment, boost exports and address the pressing challenges of liquidity for the banking sector in general and Non-Banking Financial Companies in particular.
Sitharaman has been a surprise choice for the post as she became the first woman in 48 years since then Prime Minister Indira Gandhi to hold charge of the key ministry. She met key secretaries and other top officials in the Finance Ministry. Currently, a Rajya Sabha member from Karnataka, Sitharaman, 60, will be assisted by Minister of State for Finance Anurag Thakur. In 2014, she was elected as Rajya Sabha MP from Andhra Pradesh.
Finance Ministry officials have already started discussions on the Budget and a roadmap on record level of capital spending is being prepared, especially in the infrastructure sector. Improving tax collections and raising resources through privatisation and monetisation of government-owned assets will be key to meeting the rising expenditure of the government. The Reserve Bank of India, which will release its second bi-monthly monetary policy review on June 6, is expected to support the government by improving liquidity and cutting policy rates. Financial markets will be keenly watching the decisions and approach of the new finance minister.
She was nominated as party spokesperson in March 2010 and has been a full time party worker since then.
In September 2017, she was named Defence Minister, wherein she expedited the decision-making process relating to procurement and constituted a defence planning committee to formulate an action plan for dealing with security challenges.