Finance Minister Nirmala Sitharaman has urged companies to increase investment and expand capacity without waiting for risks to subside, as depressed private investment forces government to increase spending on public works programs to mitigate the impact of the pandemic.
Speaking at the CII World Economic Policy Summit on Wednesday, Sitharaman said economic recovery will always be in jeopardy unless government and industry work to ensure the country can fend for itself and can supply the world.
“We can say today that because of the revenge buying, we are showing signs of positive growth, but until these challenges (shortages of crisps and containers, high crude oil prices) remain where they are. are, each of us needs to think about how best to proceed. can find alternative solutions. I would urge Indian industry not to delay any further consideration of increasing its capacity; you should not delay looking for new areas in which to settle with larger investments; it shouldn’t be long before you find partners who can provide you with the necessary technology, ”she said.
The finance minister’s push comes two days after the Reserve Bank of India breathed confidence in its monthly bulletin that the stage is set for India’s investment cycle to kick off and catalyze its recovery to become the world’s fastest growing economy.
The International Monetary Fund and Reserve Bank of India forecast India’s economy to grow 9.5 percent in FY22 after contracting 7.3 percent the year before.
Sitharaman said the private sector needs to go the extra mile to support the growth momentum. “Move forward, open, develop, make new investments. You see the kind of finished product that comes in. You see the kinds of imports that we bring in of components that you are perfectly capable of manufacturing. FDI is pouring in; there is no doubt. But can we also see it with India Inc. getting up and saying “yes, we are increasing our capabilities; we are no longer sitting and watching when the risks are much less. I was very touched when Uday Kotak spoke about the widening income disparities. It cannot be filled without you showing up for jobs. This cannot be overcome without you reducing the import bill for us, ”Sitharaman said.
She said that although India sees healthy growth and the Prime Minister is committed to continuing to invest in infrastructure development, the industry needs to take more risks.
“Ask us that ‘we are moving, here we have invested, but your politics bothers me, do not speak, walk the mile”, tell me that and I will do it for you. Even this morning (during the cabinet meeting), the Prime Minister told each of the ministers: “Please go back to your departments and tell me what other compliance burden you are sitting on.” Why can’t you take it off? Make it easy for industry. We can’t just say we’ve done away with 1,500 archaic laws, and that’s the end of the story. No, you have to delete many more. ‘ Every minute, the Prime Minister intends to allow industry to answer his call. And you don’t need to doubt it at all. This is a golden opportunity for India to stand up and prove that it can stand on its own feet, ”she said.
Believing that India’s economic recovery from the pandemic is a collective effort, Sitharaman said the banking sector has recovered remarkably over the past year.
“They are no longer the laggards in the Indian economy. NPAs have been drastically reduced. More … than ??10,000 crore was raised by public sector banks in the market. They are not asking the government to fund them through recapitalization. In the last three weeks that ended on Diwali, banks launched a credit awareness program, more than ??75,000 crore was divided into four or five different categories. The banks went to the districts, worked with the NBFCs, ”she added.
Elaborating on the risks to the Indian economy from the high cost of crude oil prices, Sitharaman said that without any additional demand for fossil fuel, India’s fuel bill is increasing.
“Almost 85% of the fossil fuels we consume are imported. I pay a lot more for the same amount of crude that I import now than I did last year. Even though I am able to invest more money in natural gas, the commitment with which I have to fund more transitional fuel and switch to renewables is in great jeopardy as global crude oil prices have risen so much . The convincing signs that it is in danger of collapsing are not yet visible. So there is a serious challenge, ”she said.
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