Union Finance Minister Nirmala Sitharaman on Wednesday said India has a “capitalist-respecting environment” as she pitched to international investors in the United States. She said the government was continuously working to bring reforms to cut down delays.
“It [India] is one of the fastest growing [economies] even today,” Sitharaman said, adding that there was “no better place” than India for investments. “It has the best skilled manpower and a government that is continuously doing what is required in the name of reforms, above all democracy and rule of law.”
On being asked why investors should allocate funds for India, the finance minister said the rule of law works. “So you will not have anything better... democracy-loving, capitalist-respecting environment... in India,” Sitharaman said at the event hosted by the Federation of Indian Chambers of Commerce and Industry in association with the US-India Strategic and Partnership Forum at the International Monetary Fund’s headquarters.
Sitharaman said the details of the government’s policy to attract more investments in Jammu and Kashmir would be available very soon. She listed the investment possibilities Jammu and Kashmir carries in different sectors such as tourism, fine arts, handicrafts, wood work, carpets, silk, production of saffron and apples.
The finance minister claimed that there was no trust deficit with the corporate sector and investors. This government is willing to hear and also wanting to respond, she added.
Sitharaman said the government was also committed to maintaining its fiscal deficit in India. Fiscal deficit is the difference between a government’s borrowings and revenues. The Centre has stuck to its objective of containing fiscal deficit at 3.3% of the Gross Domestic Product in the 2019-’20 financial year. On September 22, Sitharaman had said the government did not have plans to revise the fiscal deficit target.
Answering questions on the economic slowdown, the finance minister said the government was taking steps to address problems in the stressed sectors. “In order to boost consumption, the government has very clearly said public expenditure for infrastructure will be clearly front-loaded,” Sitharaman said. She added that banks and other financial companies have been asked to reach out to villages and extend credit to increase money in the hands of the people.
“The two-prong approach makes sure consumption is boosted, both through spending on public infrastructure or by putting actual money in the hands of the people, and ensures the stress, which is specific to some sectors, is addressed,” Sitharaman said.
Sitharaman’s comments come at a time when the Indian economy has been struggling with a slowdown. Data released showed that India’s industrial output contracted 1.1% in August compared to the same month last year. The economic growth rate slipped to a six-year low of 5% in the April-June quarter. This was the fourth straight quarter of slowdown.
The crisis hit the automobile sector the most. Data showed passenger vehicle sales fell for the 11th straight month in September, registering a 23.7% decline. This is one of the worst slowdowns to have disrupted the automobile industry since the collection of data of vehicles sales started in 1997.
The output of eight core sectors of the Indian industry – coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity – had declined 0.5% in August compared to the same month last year.
‘India’s commitment to fight climate change is unmatched’
Nirmala Sitharaman said India’s focus on generation of renewable energy was proof of its commitment to fight the global challenge of climate change. “India’s commitment towards climate change was very bold in the way in which Prime Minister Narendra Modi came to Paris to COP21,” Sitharaman said, according to PTI.
Of the renewable energy, solar takes the primary position, said the finance minister. “The awareness about building solar or renewable capacities is now down to every individual, rooftop solar set up are being built and everyone has given an opportunity to uplink to the grid,” she added.
Sitharaman, however, admitted that India was somewhere between 10 and 15 position or even further down in terms of carbon emission. Recently, Coal India was found to be the fourth most polluting government-owned company in the world in terms of carbon emissions since 1965. An analysis by the Climate Accountability Institute in the United States showed that just 20 fossil fuel companies have accounted for 35% of all carbon emissions in the world in this period. The emissions by these 20 companies – 12 of them state-owned – are equivalent to 480 billion tonnes of carbon dioxide since 1965, the research showed.
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