The Union Budget which is most likely to be presented by the Finance Minister herself on February 1, next year will be addressing issues pertaining to growth because the COVID-19 crisis has adversely impacted all segments of the economy, including revenue collection, disinvestment, exports, and food prices.
Sitharaman told the media that several economic data pointing to a recovery, whether it’s higher good and services tax (GST) collections, automobile sales figures, exports, foreign direct investment (FDI) inflows, forex reserves, and so on.
"All this gives the hope it is sustaining, but on a note of caution, I will still say I am waiting to get on firmer ground and talk with a lot more certainty," said the Union Finance Minister.
Sitharaman revealed that at present there is no plan to expand the free food grain scheme beyond November. Admitting that inflation is always a worry, mentioning that a small disruption in supply accentuates the problem.
FM further mentioned that Prime Minister Narendra Modi’s meeting with global investors will be very crucial, emphasizing that during the two terms, the Centre has gradually opened up the economy for FDI, except for very few sectors.
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“We have also extended a lot of tax concessions for sovereign funds. When they come, they come after an exhaustive study of what is being provided and then look for long-term sustainable investment opportunities. So, all this is getting linked to the National Investment Pipeline, where 7,000 projects have been identified after rigorous work in 2019 … Once money goes into infrastructure, it has a very strong multiplier effect,” said Sitharaman.
It is worth mentioning here that Abu Dhabi’s Sovereign Wealth Fund—MIC Redwood 1 RSC—has been granted a 100 percent income tax exemption for investments to be made in specified infrastructure sectors.
The finance minister highlighted that the success of the Centre’s Production Linked Incentive Scheme (PLI) scheme to boost large-scale electronics manufacturing in the country as a part of the Atmanirbhar Bharat (self-reliant India) initiative.
On being asked about the review of distress in the corporate sector and bank balance sheets, Sitharaman said: "I am monitoring banks. Because we could extend timely working capital, many who could have faced severe stress have just held up. Many have gone back to business and it is reflecting in the GST and PMI numbers. Banks are also open-minded. With liquidity being easily available, stressed companies will survive."
On slowing disinvestment, the finance minister said: “... It’s not an issue where irrespective of any other factor, I will still sell it. That cannot be the way it happens. We are forgetting that COVID-19 affected everything.”