'Look At The Violence And Disturbances In US': Nirmala Sitharaman On Moody's Report And Other Highlights From Her Latest Interview

Union Finance Minister Nirmala Sitharaman has said that the favourable policy and stability offered by the government in the past nine years has provided an environment to investors in India which is better than any other country.

In an interview with the Business Standard, the Finance Minister spoke on various issues ranging from G20 summit to inflation, growth and elections.

Here are the highlights of the the interview:

India's G20 Presidency: A Concrete Achievement

Reflecting on India's G20 presidency, Sitharaman emphasised its substantial impact.

"Undoubtedly, it [India's G20 Presidency] was concrete in its outcome," she said.

She highlighted the comprehensive approach taken by India, encompassing diplomatic, financial, and ministerial tracks.

"India utilised the opportunity in all respects — diplomatic, finance, and all other ministerial tracks. The contents were substantive in each of them," she added.

Economic Resilience and Tax Collections

Addressing the slowdown in tax collections, Sitharaman underscored that the buoyancy of the economy is mirrored in revenue collections.

She stressed the government's vigilant monitoring of capital expenditure at both central and state levels.

Sitharaman credited the Rs 10 trillion allocation for sustaining growth through public expenditure for its tangible impact.

She further highlighted that direct tax reduction was minimal, and compliance was facilitated by closing loopholes and enhancing ease of compliance.

Nominal GDP Growth and Buoyancy in the Economy

Despite nominal GDP growth hovering around 8 percent against the projected 10.5 percent, Sitharaman remained optimistic.

She emphasised encouraging signs in various sectors, including small and medium industries, indicative of a buoyant economy.

"I would wait to see how these developments pan out. If the activity, expansion programmes, or the coming of newer industries plateaus somewhere, I would be concerned," Sitharaman said.

"We see that passenger vehicles are getting stocked up to meet festival season demand. These are indicators of activity and good buoyancy in the economy," she added.

On 10.5 per cent nominal growth target for this year, Sitharaman said, "I would like to believe that we will achieve the target".

Private Capex and Government Initiatives

Regarding decline in private capex and government's Rs 10 trillion capex push crowding in private investment, the minister said," It (crowding in) happened last year. I wish it happens this year too, particularly given the interest being shown by investors in areas where the investments had not happened earlier, such as the hydrogen mission and green ammonia".

"Newer and big-ticket areas are also drawing the private sector’s interest. Many sovereign funds have actually come into the country in the last two years, either through the National Investment and Infrastructure Fund (NIIF) or with a partner," she added.

Agricultural Concerns and Monsoon Impact

Addressing concerns over rural income and demand due to inadequate rains, Sitharaman stressed the need for a granular assessment, accounting for regional variations and potential crop impacts.

She assured a proactive stance in managing buffer stocks and providing necessary support in case of crop failures.

Global Crypto Regulation and Inflation

On the topic of cryptocurrency ban, Sitharaman indicated a leaning towards regulation.

She emphasised that global consensus is crucial, highlighting the necessity for all countries to cooperate for effective regulation.

"If somebody wants to regulate it [cryptocurrency] alone, they cannot. We need all to be on board: If one thing happens here, similar things can happen elsewhere to make it effective. That's G20’s collective thinking," she said.

Addressing inflation concerns stemming from rising crude oil and fertiliser prices, Sitharaman acknowledged inflation as a persistent challenge and assured that measures were being taken to support citizens.

Fuel Prices and Subsidy Policies

Regarding fuel prices, Sitharaman highlighted the role of both the central government and states.

She pointed out that states like Tamil Nadu, West Bengal, Andhra Pradesh, Jharkhand did not reduce prices even after central reductions.

She said that Himachal increased the fuel prices by Rs 3 after Congress came to power.

Sitharaman also emphasised the government's commitment to managing subsidies.

"We are committed to everyone - women, farmers, backward, scheduled castes - and our subsidy and subsidy-related policies are governed by these concerns," she said.

Fiscal Deficit Target and Disinvestment

Sitharaman expressed confidence in meeting the 5.9 percent fiscal deficit target for FY24.

Regarding disinvestment, she indicated that decisions of the Cabinet will be honoured, and appropriate timing for proposals will be considered.

Internationalisation of Rupee and GST on Diesel Tax

Highlighting international interest in the rupee, Sitharaman emphasised its stability and India's growing market appeal.

"Many least developed countries think they have access to the Indian market. And therefore two-way trade can be prosperous. Now, nearly 22 countries are in discussions to see where they can tie it all up," she said.

On whether the government was open to to discussions on additional GST on diesel tax, she cited the imperative of fostering economic growth.

China's Slowdown and India's Opportunities

Sitharaman acknowledged the challenge of market access with China and emphasised the need for persistent efforts to break barriers.

She emphasized India's strengths in various sectors and highlighted the favorable policy environment for investors.

"I'm pitching India for the strengths we offer, including the English language, engineers, doctors, nurses, professionals, innovative talent of startups. The favourable policy and stability this government has offered in the past nine years, the taxation and investment policies, all of these provide investors an environment in India which is better than any other country," she said.

Manufacturing Support and GST Rate Rationalization

Sitharaman clarified that measures to support specific manufacturing sectors including the import license on laptops and PCs, are not a return to the license raj era.

She underscored the importance of supporting key sectors to enhance competitiveness.

Regarding GST rate rationalisation, Sitharaman stated that the reconstituted state panel will review the matter and submit a report to the Council.

Hindenburg Saga and Short Selling

On Hindenburg saga, the minister said short-selling is something which happens in all countries with established markets and huge listed companies with global presence.

"Regulators in India are doing the job. There is no hide and seek. But the larger point is that corporate governance comes to glare and improves because of this. Even the markets are better informed about compliance. I think it will do a lot of good to the whole country," she said.

Job Creation and Economic Rating

Sitharaman highlighted the government's focus on skilling and initiatives like the e-SHRAM portal for unorganised workers.

She emphasised recruitment efforts to fill central government vacancies.

On the question of Moody's Report flagging curtailment of civil society and political dissent among the reasons why India's rating is low, Sitharaman defended India's handling of civil society and political dissent, emphasising the country's resilience.

"I don't approve of it. If that's the measure, look at the kind of violence and disturbances taking place in the US, affecting ordinary people," she said.

"Since Independence, India has faced repeated migration. But what is the experience of those countries which are otherwise developed? Look at the way we have come out of Covid, the way we helped people who needed it the most, and the way we made sure that fiscal prudence was kept intact. If handling with responsibility is not seen in India, where else will you see it?" she added.

Exports and Trade Downturn

On declining exports and trade, Sitharaman recognised global challenges affecting various countries.

She stressed the need for diversification in markets and product offerings to navigate these challenges.

Stock Market Performance and 2024 Elections

Sitharaman assessed the stock market's record high levels as reflective of its own metrics, indicating a symbiotic relationship with the economy.

Regarding the upcoming 2024 elections, Sitharaman expressed confidence in the government's performance and affirmed its readiness to address issues including inflation and agricultural concerns.

Sitharaman's Electoral Candidacy

When asked about her potential electoral candidacy, Sitharaman stated that decisions would be made in accordance with the party's advice.