Economy not in trouble, green shoots visible: FM

Dismissing all opposition criticism, Finance Minister Nirmala Sitharaman on Tuesday said in the Lok Sabha that there are a number of greenshoots in the economy which was being managed by “very competent doctors” and that all the growth engines were firing.

In a combative hour-long reply to the general discussion on the Union Budget for 2020-21 in the Lok Sabha, she rejected all allegations of the opposition that not enough has been done by the government for spurring investment and growth and said necessary stimulus has been given to achieve the target of $five trillion in five years.

Sitharaman said the changes both in the personal income tax now and the reduction in tax for the corporates last September and the money distributed through various welfare schemes like director support for farmers have put money in the hands of the common man and those in rural areas to boost consumption.

“To those who ask us are there any greenshoots on which the economy is going to improve, I say that there are seven indicators to show that there are greenshots,” Sitharaman said listing them.

She said the government was fully conscious and taking all the necessary steps to ensure that all the sectors are given importance. “We are taking care of the economy. The economy is managed by very competent doctors,” she said in an apparent riposte to former finance minister P Chidambaram, who had said in the Rajya Sabha that the economy was in the hands of incompetent doctors even as the patient was crying for treatment.

Among the greenshoots she cited in the economy were that the global sentiments were in favour of India as foreign investors continued to show interest in the country. From a figure of $21.2 billion from April to November of 2019, foreign investment has gone up to $24.4 billion during the same period in the previous year.

Foreign Direct Investment was positive at $12.9 billion in 2019-20 as against $8.7 in 2018-19, she said adding the National Infrastructure Pipeline of Rs.103 lakh crore in five years would attract further FDI even in brownfield projects.

Industrial activity, as reflected in IIP figures, showed a positive growth of 1.2 per cent in December, 2019 as against a negative 3.4 per cent and 4.3 per cent in the previous months.

The finance minister said foreign exchange reserves stood at $466 billion January this year as against $415 billion. The gross GST collection in January this year was Rs 1,10,888 crore and between April 2019 and January this year, it has surpassed Rs. one lakh crore mark for six times, which she said was a reflection of the increased economic activity.

Sitharaman said the second market continued to be upbeat and the four growth engines, including private and public investment and consumption were growing.

The Insolvency and Bankruptcy Code of 2013 has led to resolution of disputes and cases quickly resulting in realisable amounts touching more than Rs four lakh crore.

She said the RBI monetary policy stance has resulted in liquidity for home and auto sectors and others steps of the central bank would make the economy move further. The interest rate for house building advance will be lowered to promote low-cost housing. Under the PM Housing Scheme 1.95 crore affordable houses will be built in rural areas within three years.

She said the government has put in place investor-friendly policies attract foreign investment while Angel Tax will not be applied on new investors.

Investments by Indian firms in foreign countries in January 2020 rose by nearly 40 percent to $2.10 billion on a yearly basis, according to data by the Reserve Bank. Indian companies had invested $1.47 billion in their overseas ventures in the same month a year ago. Compared monthly, January investments were higher than $1.99 billion in December 2019, showed the RBI data on ‘Outward Foreign Direct Investment (OFDI)’. Of the total capital invested by the India Inc in January this year, $793.82 million was in the form of equity capital, $368.55 came in as debt capital, while the rest $890.75 million was through the issuance of guarantee.