Junior minister for finance Anurag Singh Thakur has been in the thick of action, working closely with his boss Nirmala Sitharaman, on steps to revive the economy. In an interview, he tells TOI that the government is open to more steps and clarifications on LTA benefits for private sector employees may come as early as this week. Excerpts:
What is the feedback that you are getting about the latest round of stimulus?
The overall intention was to help the less privileged or the less fortunate through this package. It was given to government employees, but the spending will be on certain goods, which will benefit the common small businesses that have been affected. If state governments and corporates come on board and take advantage of the scheme, a large section can be helped, directly and indirectly. People are waiting for the fine print, what are the rules and the moment they go through that you will see many state governments deciding on similar packages. Even the corporate sector may consider them.
On the private sector side, when will there be clarifications regarding those who have opted for the exemption-free regime or have already withdrawn their LTA?
Of course, there will be clarifications on who qualifies for the scheme and who are excluded.
How soon can we expect those clarifications?
In the coming week.
What do you have to say about the criticism that both the the stimulus packages are well short of the expectations and they do not take care of the stress that is there in the economy?
If you look at the earlier packages too, there was criticism. There will be some section which will believe in criticising the measures. But you have to look at the larger picture, India is the only country which has provided free foodgrains to the poorest 800 million, and for eight months . In addition, Rs 68,000 crore has been transferred directly to the bank accounts of the poorest of the poor. Then there are steps for MSMEs. We have been fine tuning all these packages from time to time based on feedback.
The steps have helped get the economy getting back on track and this is visible in the numbers, be it record e-way bills or GST figures. People who had gone back to their villages are trying to go back to the industries. If you look at the last couple of months, people now have more confidence but everyone needs be cautious.
Do we expect more steps if the situation demands. There were expectations that some of the services sectors such as tourism, hospitality, restaurants, airlines that they would be helped with some measures.
Restaurants which were shut started home delivery, even five-star hotels have started home delivery. Their volume has increased. Earlier, we used to go to salons and now they are coming to your home. So, things have changed drastically. Many sectors such as travel, tourism, hospitality, cinemas have been impacted the most. The moratorium scheme gave them some relief, the emergency credit line scheme they got additional 20% working capital. There might be many who do not bank, they don’t avail the banking services, but we tweaked the relief packages to include professionals and other such small segments. We are not closing the doors. We are always open looking at the situation of how quickly each sector is coming back on track. If any sector, whether it is services or manufacturing is hit, and needs handholding and help we are still open to look those sectors. We have used this period to usher in several reforms, which were pending for years be it in the farm sector or labour or MSMEs.
Is the government too worried about the fiscal deficit and holding itself back from a big bang stimulus package?
Our packages are line with what other countries have done. What we are trying to do is that whatever we do today should not impact the future. It is a balanced approach. We don’t want businesses to suffer and close down, we want them to survive, revive and grow. Supply side has been fixed now to boost the demand the government has taken several measures. To say whether the stimulus was good enough or not I think time will tell.
Some of the states are still unhappy with the GST compensation formula and they want the Centre to borrow the entire Rs 2.3 lakh crore…
We have had detailed discussions and it was clearly stated that no state will have to bear the burden. As of today, most states have agreed to the Rs 1.1 lakh crore borrowing formula.
What do you have to say to the charge that the decision in the GST Council was taken on majoritarian grounds and it was not unanimous?
If you ask me after 22 hours of patient hearing, due deliberations, discussions, if 21 states are asking for their share of money, they want to raise it and they want the GST Council and the Centre to facilitate it, nine states can’t deny the right of 21. That would be unfair. All we said was let 21 states raise the funds, we will facilitate and let the nine states, if they want to continue discussions with us we will, continue discussions and you have the options and you could look at those options.
What is the feedback about the rural economy?
Rural economy is actually doing well. It is not only MGNERGA or agriculture, but it is also the infrastructure spending, which is helping create more jobs. There is a demand for tractors, motorbikes, four wheelers, houses. People are spending on these and are not holding back.
Inflation is at 7.3%. How big a worry is that? What is being done to tackle high food inflation?
If you look at the six years of the Modi government, inflation has always been under check if you compare with the double-digit figure during UPA rule. I don’t see it as a challenge, this is a temporary phenomenon and is seasonal and will ease out in the coming days. Inflation will be under control soon.
Source : PTI