Finance Minister Nirmala Sitharaman on Tuesday urged the industry to overcome its hesitation and be the engine that pulls the Indian economy forward, Mint reported. She was speaking at a post-budget meeting organised by the Confederation of Indian Industries in New Delhi.
Sitharaman presented the Budget for 2020-’21 on February 1. In her speech, Sitharaman announced significant cuts for individual taxpayers. The finance minister proposed to increase the agricultural credit availability to Rs 15 lakh crore. However, she admitted that the government would miss its fiscal deficit target for 2019-’20, and set the probable deficit at 3.8%, 0.5 percentage points above the estimate made in July last year. Sitharaman also said that India’s nominal GDP will grow at 10% in 2020-’21. The Indian economy grew at just 4.5% in the second quarter of 2019-’20, the slowest in 6 years. The government has forecast an annual growth rate of just 5% for the financial year, the slowest in 11 years.
On Tuesday, the finance minister told members of the industry body that the “larger picture” was macro-economic stability.
“I don’t think in today’s condition it can just be government spending, which can pull the economy towards that growth that all of us want,” Sitharaman said. “I strongly believe that industry today will have to come out of that hesitation which...you have in your mind, but I think it’s now time to come out of that hesitation.”
“We have done whatever we can, we are not closing the doors we are still ready to do much more but I want it to be meaningful intervention from the government rather than rushed,” the minister added.
The Union minister and senior finance ministry officials are expected to travel to at least three other cities to meet industry and trade leaders to discuss Budget 2020. “This group [officials from economic affairs, expenditure, revenue, DIPAM, banking] will be coming with me in the next few days to at least three cities [Mumbai, Chennai and Kolkata] in India, to interact with the industry, economists, trade bodies, traders, farmers and farmers’ group..before this weekend,” Sitharaman said.
In her Budget speech, Sitharaman had proposed a 5% health cess on imports of medical devices. This will be besides the basic customs duty, which is currently around 7.5%. When asked if this was “protectionist move”, Sitharaman said the decision is meant to encourage the “make in India” scheme, according to Moneycontrol.
“In case the production in India is not sufficient in India to meet our demand and we still want to import... but even then that additional import and the revenue which is going to be generated as a result will clearly to be directed towards medical infrastructure creation in those aspirational districts where you don’t have enough hospitals which could be empanelled under Ayushman Bharat,” Sitharaman said.