Union Finance Minister Nirmala Sitharaman addressed a press conference in New Delhi on Friday. She spoke about the government’s reform agenda and the state of the economy. The finance minister said the tax scrutiny process would be simplified along with the GST system.
Members of the Prime Minister’s Economic Advisory Council have sounded warnings about the economy. Shamika Ravi, who is also the research director of the Brookings India think tank, on Friday said the country was facing a structural slowdown. She added that many ministries need to follow “a national growth strategy with time-bound goals”.
Ravi’s statement came a day after NITI Aayog Vice Chairperson Rajiv Kumar said extraordinary steps were needed to deal with an unprecedented crisis in the financial sector. He said the government needed to encourage the private sector to invest, and eliminate apprehensions about policies in the minds of private players.
Here are the top updates:
8.39 pm: “Every sector of economy is under grave stress,” Tewari adds. “The textile industry has been putting out advertisements on a daily basis for past one week, explaining that this is perhaps the worst period which the textile industry has seen in the past seven decades. Much that the BJP-NDA government would like us to believe that this is because of Pandit Jawaharlal Nehru, unfortunately that is not the case. This is the making of the NDA-BJP government in the past five years.”
8.27 pm: Congress spokesperson Manoj Tewari says NITI Aayog Chief Rajiv Kumar should be congratulated for “admitting” that the current stress in the financial sector is unprecedented, PTI reports. “When you have the Indian economy enter its choppiest phase perhaps, the silence of the prime minister and the finance minister are deafening,” he says. “All you see is deflection, politics of vendetta, undeclared emergency across the country.”
7.37 pm: Congress spokesperson Sanjay Jha calls Sitharaman “clueless”. “The Finance Minister appears clueless: without jobs there is no future, Madam,” he tweets. “No jobs=No Income=No demand=Lower Prices=Lower Production=No need for jobs=Layoffs= Economic Recession. Elementary Madam! Are we headed for a disaster?”
7.22 pm: Congress spokesperson Randeep Surjewala lashes out at Prime Minister Narendra Modi. “3 years after the introduction of the faulty GST, India continues to suffer massive shortfalls in revenue,” he tweets. “If PM Modi had prioritised the economy over his sartorial choices, foreign parades and jungle photo shoots, this day would not have come.”
6.52 pm: Congress leader Rahul Gandhi criticises the government. “Govt’s own economic advisors have finally acknowledged what we cautioned for long - India’s economy is in a deep mess,” he tweets. “Now, accept our solution and remonetise the economy, by putting money back in the hands of the needy & not the greedy.”
6.42 pm: Surcharge levied on High Net worth Individuals will be reviewed, says Sitharaman.
6.33 pm: Sitharaman says revision of one-time registration fee on vehicles has been deferred till June 2020.
6.25 pm: Asked why the announcements to boost the economy were not made during the Budget, Nirmala Sitharman says she took the decisions after talking to industry representatives.
6.19 pm: The finance minister says another set of announcements for the economy will be made in the middle of next week.
6.17 pm: No overreach by tax authorities will happen, assures Sitharaman. Wealth creators will be treated with greater sensitivity, she adds.
6.14 pm: Both electric vehicles and intermediate commercial vehicles will continue to to be registered. The government will focus on developing infrastructure for electric vehicles. The government will also consider a vehicle scrappage policy, announces Sitharaman.
6.10 pm: BS-4 vehicles purchased up to March 2020 will remain operational for the entire period of registration, says Nirmala Sitharaman.
6.08 pm: An inter-ministerial task force has been set up to finalise the pipeline for spending Rs 100 lakh crore for developing modern infrastructure over five years.
6.04 pm: Delayed payments from government/CPSEs will be monitored by the department of expenditure and its performance will be reviewed by the Cabinet secretariat, says Sitharaman.
6 pm: The government proposes to set up to provide credit enhancement for infrastructure and housing development projects, says finance minister.
5.58 pm: The MSME Act will now go to the Cabinet with inputs of ministries so that there is one meaningful definition of MSMEs, says the finance minister. It will not only be linked to turnover.
5.55 pm: All pending GST refunds to MSMES till date shall be sorted out within 30 days from today, says Sitharaman. For future GST refunds within 60 days after it arises.
5.51 pm: Non-banking finance corporations will be allowed to use Aadhaar authenticated bank KYCs to avoid repititions.
5.47 pm: The government will release Rs 70,000 crores upfront for public sector bank to boost economy. “Additional lending and liquidity to the tune of Rs 5 lakh crores can be made available by providing this capital for the PSPs,” she adds.
5.45 pm: One of the taxation measures announced to boost economy is the withdrawal of angel tax provisions for startups and their investors.
5.40 pm: CSR violation will not be a criminal offence, it will be a civil liability, says Nirmala Sitharaman.
5.37 pm: The minister announces removal of enchanced surchage levied on domestic investors in equity market, and long and short-term capital gains.
5.28 pm: Sitharaman talks about the simplification of the tax scrutiny process, and a simplfied GST system. “The whole process is going to be faceless & randomised,” she adds. The press briefing can be followed here:
5.25 pm: The finance minister says the government has kept reform on top of its agenda. “It is a continuous process and we are treating it as a continuing endeavour,” she adds. “GDP growth continues high above other countries; consumption growth is down in not just emerging but also advanced economies; volatile situation has developed in global trade.”
5.22 pm: Nirmala Sitharaman presents a picture of the global economic outlook, says global GDP is 3.2% and may be revised downwards. “That is one broad picture,” she adds. The slowdown in growth is occurring in developed countries as well as emerging economies, she points out, setting the context of her address.
5.16 pm: The Indian economy is in a state of “high blood pressure”, Apollo Hospitals Executive Vice President Shobana Kamineni has told NDTV. “Every country goes through its stresses and our country has a few more going on,” she says. “It is global stresses, it’s environment stresses, it is job stresses, it is tensions that are coming from all over. So I would say that we are in a state of high blood pressure.”
5.01 pm: NITI Aayog Vice Chairperson Rajiv Kumar requests the media to stop “misinterpreting” his statement. “The government has been taking bold steps to accelerate our economy and will continue to do so,” he adds. “There is no need to panic or spread panic. The cassendras should now accept that the government is well on top of the situation and will do all it can to revive the ‘animal spirits’ in the economy.”
4.49 pm: The Moody’s Investors Service lowers India’s GDP growth forecast from 6.8% to 6.2% in 2019-‘20, reports Mint.
4.41 pm: Total Union government expenditure as a proportion of the Gross Domestic Product fell from 13.9% in 2013-’14 to 12.2% in 2018-’19.
4.38 pm: In June, India’s eight core industries grew at their slowest rate in over four years, rising 0.2% as compared to the same month last year. The core industries had expanded 7.8% in June 2018.
4.36 pm: Nirmala Sitharaman’s press conference comes at a time when sectors such as automobile and fast-moving consumer goods have reported sluggish demand and low sales.
4.35 pm: Media reports speculate that the finance minister may address the issue of surcharge on foreign portfolio investors. In her Budget speech, Sitharaman had proposed to impose a higher tax surcharge on the super-rich.