Shun hesitation, make investments to drive growth: Sitharaman to India Inc

FM Nirmala Sitharaman. Photo: Sanjay K Sharma
Finance Minister Nirmala Sitharaman on Tuesday exhorted the industry to shun hesitation and be a partner in driving growth, saying the government has already initiated several measures and is willing to take more steps.

The government has already reduced corporate tax rate, removed Minimum Alternate Tax (MAT) and abolished dividend distribution tax (DDT), she said while addressing the industry leaders here.

The approach has been "we shall spend on asset creation and it is the cascading effect of this spend which is going to help the industry. So we expect you to be... the engine to pull the economy forward", the finance minister said.

She added that "in today's conditions, it cannot be just the govt spending which can pull this economy towards that growth which all of us want. I strongly believe industry today will have to come out of that hesitation, which you held and rightly in your mind. But I think it's time now to come out of the hesitation. I called it self-doubt sometime back".

Sitharaman signalled that the government is willing to do more in terms of necessary measures to prop up the economy.

"We have done what whatever little we can, we are not closing the doors, we are still ready to do and even much more. But I want it to be a meaningful intervention from the government rather than rush to do something which may not be necessary at all for the government," she said.

Talking about the measures taken to help the industry, the minister listed some of them like corporate tax rate cut and removal of Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT).

She said, "It is now time for all of us to pull our weight along, make sure that the economy has support of each one of us, where each one will have to become the engine for pulling this economy up. After all, the spirit of enterprise is yours, we are here to facilitate." On raising the customs duty on certain items, the minister said, import of medical equipment which are not made in India will come at a duty, but the revenue collected will be utilised to fund creating medical infrastructure in aspirational districts where there are not good hospitals.

"So that is the extent to which we want to make sure that government's money will not be spent frivolously," she said emphasising that the 
biggest priority of the Budget was to maintain macro-economic stability.

She clarified that the duty on medical devices is not with a sense of being protectionist.

"If there are medical devices made in India and under Make in India, we wanted encouragement of India-made goods, at least for those we didn't want to have imports flooding the market," she added.

Recalling the past experience of the government fiscal expansion during the global economic crisis, Sitharaman said the government has learnt from the past experience and decided not to go on the splurge to boost the economy.

"I am also indicating clearly in contrast to what had happened in response to 2008-09. I am also clearly indicating that I am going to clearly lay a glide path for fiscal deficit so that treatment to the economy which is now so demanded and justifiably demanded will be given clear monitoring.

"We are not going to leave it unendingly as though there's never going to be an end and the treatment has to continue forever. If economy shows clear improvement, we shall focus our attention to something else. That's the difference between 2009 treatment and now," she said.

Last time, it was left without an end therefore the splurging continued, she said, adding, the present government between 2014-19 had to sort that mess out which resulted in twin balance sheet problem.

On scrappage policy, the finance minister said some fine-tuning is being done and soon it will be out.

It would focus on eliminating the fleet of old polluting commercial vehicles plying on the country's roads. The proposed policy, once approved, will be applicable on all vehicles including two- and three-wheelers.

The Investment Cell mentioned in the Budget has been conceived to implement the National Infrastructure Pipeline, she said, adding, this platform could be further extended to investments across sectors, including health.

Sitharaman also announced that she would be meeting various stakeholders in three metros beginning February 7.

"This group will be coming with me in the next few days to at least three cities --Mumbai, Chennai and Kolkata -- in India, to interact with industry, economists, trade bodies, traders, farmers and farmers' group," she said.

Speaking about taxation of REITs and InvITs, Revenue Secretary Ajay Bhushan Pandey said, the department will look at any anomaly and address if required.

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