Finance ministry lists steps taken to boost economy, Sitharaman says results have begun to show
Chief Economic Advisor KV Subramanian said the government was focusing on increasing consumption to boost growth.
The Ministry of Finance on Friday listed the steps it had taken to boost the Indian economy. Finance Minister Nirmala Sitharaman claimed that the “results of some measures have started showing”.
The statement came weeks after India reported that its Gross Domestic Product had contracted to 4.5% in the July-September quarter – the slowest growth rate in more than six years, and the sixth straight quarter of slowdown. The growth rate in April-June was 5%. Core sectors such as automobiles and manufacturing have also slowed down gradually due to weakened consumer demand and dearth of investments.
Sitharaman said her ministry was working on economic matters “wherever it is needed”. Sitharaman presided over the ministry’s press conference, while Chief Economic Advisor KV Subramanian and Revenue Secretary Ajay Bhushan Pandey addressed it.
Subramanian said 66% of the Rs 3.38 lakh crore budgeted expenditure had already been spent by the government.
Subramanian said record Foreign Direct Investment inflow had helped the government. “The evidence of measures to boost investment is actually seen in the record FDI inflows – US $35 billion in the first half of 2019-20 as against US $31 billion during the same period last year,” he said, according to the Hindustan Times. “It’s a good sign of foreigners seeing India as a very important destination.”
Subramanian said the government was focusing on increasing consumption to boost growth and highlighted measures such as cutting corporate tax, capitalisation of public sector banks and providing funding to realty projects. The government was trying to clear all past dues of public sector undertakings, he said, adding that Rs 61,000 crore were cleared in the past two months.
To support non-banking financial institutions and housing finance companies, the government has sanctioned Rs 4.47 lakh crore, he said. Indian Railways and the Ministry of Road Transport and Highways are projected to have taken capital expenditure of Rs 2.46 lakh crore by December 31, he added.
Earlier this month, the Reserve Bank of India lowered its projection for the economic growth rate to 5% for 2019-’20 financial year, just two months after it had forecast a 6.1% growth rate. The central bank cited weak domestic and external demand as a reason for the downward projection.