Finance Minister Nirmala Sitharaman on Tuesday urged India Inc to come forward and take risks and assured industry captains of addressing issues related to competitiveness, including high power tariffs, and cumbersome regulatory compliances.
She said the government is committed to working towards ensuring policy certainty. Addressing industry captains at a CII interaction here, Sitharaman, who is on a two-day visit to Mumbai, said regulators also had a key role in ensuring the same and the government is working with them as well on this important issue.
Expressing the government’s keenness to facilitate trends and sectors that are the future of the Indian economy, she acknowledged there are seminal changes happening in the financial sector, which the government policy should facilitate. “The economy is moving gradually from a bank-led lending model to a more market-based finance model,” she said.
Once the proposed Development Financial Institution is operational, it will perform the function of long-term lending which traditionally has been done by banks. This would increase competition for the banks and also improve their efficiency, she added.
The Finance Minister also spoke about the importance of the government and industry working together to “create India’s own equity capital” and identifying how the sunrise sectors and startups can contribute to the future of India and how the government could facilitate them.
At the same event, Finance Secretary TV Somanathan said the government is considering instituting insurance bonds as alternatives to bank guarantees. On the issue of arbitration awards being typically appealed, he said that a behavioural change is required.
Revenue Secretary Tarun Bajaj said the Department of Revenue was working on the tax-related issues of startups and sought industry inputs on the same.
Sitharaman on Tuesday also met senior officers of the Income Tax Department and officers of GST and Customs and reviewed the performance on the tax mobilisation front. Also present at the meet were Bajaj, CBDT Chairman J B Mohapatra, and CBIC officials. The government’s total tax collection in April-June grew about 86 per cent to over Rs 5.57 lakh crore.
On Wednesday, Sitharaman will chair the annual performance review of public sector banks (PSBs) with the heads of all these banks. She will also launch EASE 4.0 (Enhanced Access and Service Excellence). EASE is a common reform agenda for PSBs aimed at institutionalising clean and smart banking. Its first edition, EASE 1.0, was launched in January 2018.
The meeting with MDs and CEOs of PSBs assumes significance given the importance of the banking sector in generating demand and boosting consumption. Recently, the Finance Minister had said the government is ready to do everything required to revive and support economic growth hit by the Covid-19 pandemic.
The meeting is likely to take stock of the banking sector and progress on the restructuring 2.0 scheme announced by the RBI Banks are likely to be nudged to push loan growth in productive sectors, said a banking source.