Amid growing concern over the slowing economy and former Prime Minister Manmohan Singh slamming the government policies for it on Sunday, Finance Minister Nirmala Sitharaman said the government was in consultation with various sectors and would respond to the situation as and when required.
“The government has been in consultation with several sectors. Because in some sectors, the inventory is piling up… (There are) different issues for different sectors. Having heard that and spent some time to see how best we can respond, the first tranche of announcements was made on August 23,” Sitharaman said here on Sunday.
As India’s gross domestic product (GDP) growth rate fell to a six-year low of 5 per cent for the April-June quarter, apprehensions of a slowdown have started getting deeper.
The Finance Minister who recently announced a slew of measures to retrieve the situation, here on Sunday avoided a direct answer to a query whether the economy was cooling.
“Last Friday, I made another set of announcements. I have also said, I will come back again when the process of consultations are over, and we have worked on or we can respond. So I will be coming back to respond to sectors, which have come to us and which want some relief from us,” she said.
Earlier, the Minister interacted with tax officials, traders, industrialists and entrepreneurs in the city.
Concerns over cooling of economy resurfaced as a slowdown in manufacturing pulled the GDP growth rate in the first quarter down to 5 per cent, marking the fourth successive quarter of decline. From 8 per cent in Q1FY19 to 5 per cent Q1FY20, the GDP growth rate has fallen by 3 per cent in barely a year.
On the slide in auto sales, the Minister said the sector was facing problems due to several factors, including the transition from BS-IV to BS-VI emission norms and prospective buyers were delaying their decision.
To help revive the auto sector, Sitharaman on August 23 had announced the government departments would be allowed to buy new vehicles, automobiles purchased till March 31, 2020 would avail the benefit of additional depreciation of 15 per cent, with total depreciation up to 30 per cent, and BS-IV vehicles bought till March 31, 2020, would remain operational for their entire registration period.
On fears of job losses due to the recent announcement of the merger of banks, she said there won’t be any retrenchment and the government was infusing capital into the merged entities to strengthen the banking system.
On changes to the goods and services tax (GST) rates, Sitharaman said it would be decided by the GST Council.
She said the measures announced in the July budget were showing results on ground and job creations by the informal sector, the main employment generator, “remains undocumented”.
The recent phase of low demand across sectors and decline in manufacturing activity have invited government criticism from several quarters, along with the political opposition.
Former Prime Minister Singh earlier in the day slammed the NDA government and blamed its policies for the economic slowdown. “India has the potential to grow at a much faster rate, but the all-round mismanagement by the Narenrda Modi government has resulted in this slowdown,” said Singh.
Calling the slowdown a “man-made crisis”, Singh, an eminent economist, primarily blamed the demonetisation and a “hastily implemented GST” for the present state of the economy.
Criticising the government, the former Prime Minister said, “I urge the government to put aside vendetta politics and reach out to all sane voices and thinking minds, to steer our economy out of this man-made crisis.”
However, reacting to Singh’s allegation of vendetta politics, Sitharaman said, “Is Dr Singh saying ‘instead of indulging in political vendetta they should consult sane voices?’ Has he said that? All right, thank you, I will take his statement on it. That is my answer.”