India’s 10-year trajectory of overturning economy lesson for Harvard: Sitharaman

“Regardless of whatever value the rupee was (against USD) in 2014 (under the UPA government), we were a fragile economy… fifth from the bottom…There was double digit inflation for 22 continuous months. How does it matter what the currency value is in such a situation?

From there, we are among the top five economies in the world. When it comes to employment, the data is collected only in a section of the formal sector, not even the entire formal sector, and no data at all in the informal sector. Data itself is inadequate and see this is a limitation, not a matter of pride…When we see the data from the banks of persons who have benefited from government schemes, for street vendors, or startups, it shows crores have been benefited. Around 10 lakh have been given jobs through rozgar melas in around 12 months,” Sitharaman further asserted.

During her Gujarat visit on Saturday, the Union Finance Minister visited Ahmedabad and Vadodara as part of her campaign visits ahead of the Lok Sabha elections.

Addressing a session on ‘Viksit Bharat 2047’, jointly organised by the Gujarat Chamber of Commerce and Industries (GCCI) and Institute of Chartered Accountants in Ahmedabad, Sitharaman went on to hail the government interventions for overturning the economy to an extent that “today RBI says twin balance sheet is no longer a problem but it is an advantage”,

The session, which was followed by a question and answer round, saw several attendees from the commerce and industries segment airing several difficulties. Issues raised included a demand for reducing capex and turnover of Rs 50 crore to be considered as ‘medium enterprise’ as the same is “very high”, and recommended that the same should instead be reduced to Rs 20 crore. Sitharaman added that she’ll take that as a suggestion, adding that a lot of changes were already made in 2019-20 based on suggestions from the industries.

Among other issues was that old businesses in manufacturing in sectors like textiles and chemicals are facing problems. “For exports, we are facing new problems of shipping costs and insurance costs. Insurance cost has increased by 800 per cent… shipping cost has increased by 300 per cent,” an industrialist rued.

In response, Sitharaman said, “We’re moving towards newer and newer ways of supporting industries…But in order to address issues arising out of newer situations…you may send us written suggestions, rather than leaving us or bureaucrats to think about it.” Interacting with businessmen and industrialists in Vadodara, Sitharaman said that the emphasis of the government has been on improving “doing business” in India in order to boost the economic growth.

Adding that the advice that India– an agrarian country– did not need to emphasise on manufacturing was “misdirected”, Sitharaman said that by 2047 India will be a country of 70 crore middle class families with needs that can be met by manufacturing in the country.

Sitharaman said, “India needs to have agriculture to make farms more rewarding work… Much work has to be done to improve harvest and storage (of farm produce)… But a lot of people say India does not need to have manufacturing. It is misdirected advice. We do need to have manufacturing and India’s strength has been in the Medium and Small Enterprises. MSMEs have always lived in the country and contributed to the GDP… The large companies can meet the demand and boost the economy. There should be no cloud of doubt about manufacturing. If India can manufacture what we import it will be better to produce them. By 2030, we will be a country of 30 crore middle class families and by 2047, it will be 70 crore middle class families with buying power…”