Finance Minister Nirmala Sitharaman on Saturday urged India Inc to unleash “animal spirits” and bring in fresh investment to make India one of the fastest-growing economies of the world, reported PTI. Animal spirits, a term coined by British economist John Maynard, describes how people arrive at financial decisions in times of economic stress or uncertainty.
“I would like now to see private investors and private industry in India coming forward with that so-called animal spirits to show that it is possible for India [to be] one of the fastest-growing economies,” she said at an All India Management Association event. “We need capacities to be ramped up, we need expansion, we need more production of very many such products, which are so required for the economy.”
Sitharaman said that the government has taken several steps, including a reduction in the corporate tax rate, to facilitate investment. The corporate tax rate was cut down by almost 10% in September 2019. The finance minister said that following the rate cut, she has been waiting to see greater investment from the private sector in India.
She said that the Union Budget laid down a clear policy-driven agenda for private sector-led growth, reported The Tribune. Sitharaman asserted that each line of the Budget was “carefully thought out” with Prime Minister Narendra Modi reviewing the inputs of the business community. “The PM brought in his immense experience and direct contact with the industry to shape the Budget and now the industry must make the best out of it,” she said.
In defence of the Centre’s privatisation programme and easing of foreign investment norms, Sitharaman said the decision reflected the mood of the country since incremental change was no longer valid. Incremental change is a process that adjusts the status quo by making minor changes.
“We need transformational change without which it is not possible for India to reach the level that is so necessary to meet the aspirations of most of the people,” she said. In her Budget speech on February 1, Sitharaman had announced that two public sector undertaking banks and one general insurance firm would be privatised this year.
She said that the taxpayer’s money should go to people who need support and not kept in institutions, which you are not very good at turning. “The government finds more sense for such undertakings to be run with professional skill available outside the government,” the finance minister said.
She also highlighted the government’s commitment to spending massively on infrastructure and promised that the high capital expenditure will not be a one-year story. “Therefore, you will have to contribute to sustaining growth because the government has chosen to spend on infrastructure in a big way,” she said.