1. Nirmala Sitharaman hints Manmohan Singh ‘crystal-gazing’ over demonetisation remark

Nirmala Sitharaman hints Manmohan Singh ‘crystal-gazing’ over demonetisation remark

As the Opposition steps up attack on the government on demonetisation, commerce and industry minister Nirmala Sitharaman said any likely impact on GDP will be limited to only the third quarter.

By: | Published: November 25, 2016 6:27 AM
“India will soon convey its IT industry’s concerns about the American visa system to the new administration once Donald Trump takes over as the US president in January,” Nirmala Sitharaman said. (PTI) “India will soon convey its IT industry’s concerns about the American visa system to the new administration once Donald Trump takes over as the US president in January,” Nirmala Sitharaman said. (PTI)

As the Opposition steps up attack on the government on demonetisation, commerce and industry minister Nirmala Sitharaman said any likely impact on GDP will be limited to only the third quarter. She admitted that labour-intensive sectors have been hit to some extent by the banknote ban, but added that difficulties in payments to workers will likely be over in 10-15 day. In an interview to FE’s Banikinkar Pattanayak, the minister also said the government doesn’t have any plan to further ease FDI rules in business-to-consumer e-commerce, beyond the marketplace model, and shares why more curbs on foreign direct investment in the tobacco sector are necessary even though NITI Aayog has opposed the move.

“India will soon convey its IT industry’s concerns about the American visa system to the new administration once Donald Trump takes over as the US president in January,” the minister said.

Excerpts:

Former PM Manmohan Singh said on Thursday that demonetisation will drive down India’s GDP by as much as 2 percentage points. Has the government firmed up any estimate of the impact of such a move on GDP?

I heard the former prime minister today. I think it’s too early for anyone to estimate what impact demonetisation will have on GDP. I agree that some of the labour-intensive sectors where many workers are paid in cash (have been impacted). Many of the exporters we met (on Monday) also told me that they somehow managed the cash issue last week but the following week is crucial. But even that day, the impression that exporters gave me was that things would get back to normalcy soon. Therefore, I don’t think the difficulty related to payments to workers will protract beyond these 10-15 days. So even if there is going to be some impact on growth, it won’t last beyond this quarter. And I am saying this even without being conservative in my assessment of the situation. Therefore, any comment that there will be a 2-3% fall in GDP is very far-fetched. Unless you are crystal gazing, it’s not possible to reach any such figure now.

After rising for two straight months through October, will exports contract again in November due to demonetisation?

I don’t have any such fear about export prospects following demonetisation. There has been a depreciation of the rupee as well (the rupee hit an all-time low of 68.86 on Thursday). So we have to take into account the (beneficial) impact of the rupee depreciation on exports as well, which a lot of people are talking about.

Could demonetisation have been handled better?

On a decision of this scale, when 86% of the total value of currency is demonetised, it will definitely have an impact on society. But secrecy had to be maintained, else some people would have found ways to whitewash their money. This is not to suggest that all those who have had cash are black-money holders. But as and when some problem in the ground is reported, the finance ministry has swung to action. At the same time, efforts have also been made to make up for the demonetised currency with the new notes so that the transactions for economic activity are not hampered. But the fact that smaller denomination notes were not adequately available at that point of time certainly caused some disruptions and these have been acknowledged by every one of us. So with the options we had, we planned it in such a way that the impact would be minimal. And that (impact) is now slowly petering out.

The commerce ministry has supported the DIPP’s proposal for further curbs on FDI in the tobacco sector, including in licensing for franchise, trademark, brand name and management contract. The NITI Aayog had certain reservations on such a proposal. Have you sorted out the differences now that the proposal is expected to go the Cabinet?

First of all, we have ratified the WHO agreement (on tobacco control), so we have to work towards cutting down on production. We also have to encourage the farmers to shift from tobacco to some other crop. And this alternate crop should fetch him equal or more returns. We are also concerned about the hazardous impact of smoking and chewing tobacco on human health. So keeping in mind the larger issue of public health and the country’s commitment to the WHO, I think the question of curbs on FDI in tobacco has to be viewed in different ways than FDI in other sectors.

But the commerce ministry wants FDI to continue in tobacco procurement for the time being.

Procurement of tobacco through auctions happens in a transparent manner and is tracked by the Tobacco Board as well. So to the very limited extent of foreign money coming in for the time being for procurement is a different thing. The intention is not to put farmers into immediate trouble until an alternate arrangement is made for them.

Is there any plan to relax FDI rules in B2C e-commerce, beyond the marketplace model?

No. At the moment, there is no such plan.

Do you intend to relax the domestic sourcing rule for retail FDI from the current 30%?

No, there is nothing of this sort that we are contemplating at this moment.

Has Apple approached you after the new FDI rules are notified? Is the company seeking more concessions from the government to set up its stores in India?

No. And no such proposal for concession (by Apple) has come to me.

US president-elect Donald Trump has said his country will pull out of the mega trade deal Trans-Pacific Partnership (TPP). Will it change the course of the Regional Comprehensive Economic Partnership (RCEP) of 16 nations, including India and China, aimed at countering the TPP?

The TPP is different from the RCEP. Although seven of the 16 countries in the RCEP negotiations are also TPP members, and some of them may want to bring some features akin to those of TPP’s to the RCEP, these are different agreements. The RCEP will continue and we are committed to concluding it at the earliest.

Do you see a more protectionist US under Trump, especially towards the Indian IT industry?

We really don’t know what his (Trump’s) positions will be after he formally takes over on January 20. He is saying quite a few things now. He has said quite a lot of things earlier. It may not be right on my part to speculate what will happen on or after January 20th when he takes over as the US president of the US formally. But it will certainly be our efforts to have interactions with his team at the earliest so that India‘s concerns are adequately addressed.

Effective today, the UK has tightened certain visa rules non-EU professionals. There are fears that rules on student visas will be tightened further. How are you planning to take it up with them?

We have broadened our engagement with the UK after the new Prime Minister Theresa May took over and it will continue. We are clear that the matters related to visas, including for students, will be raised with the UK at every possible opportunity.

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    Girish
    Nov 25, 2016 at 3:56 am
    If he had so much of qualifications, what was done to reduce black money during his tenure. In fact the history will say, it is the decade in which black money was ded the most.
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      Girish
      Nov 25, 2016 at 3:58 am
      Knowledge on papers has no value, if it's not used for the up liftment of society by a person who held the PM post for decade.
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        Ritesh
        Nov 25, 2016 at 3:27 am
        Gentleman, there is no need to get irked up. We all respect him for his knowledge but just sheer brilliance doesn't make you a great leader and the person you call Feku is also your PM and is followed by many leaders across the world including Shinzo abe. So you too learn to respect. Thanks.
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          R V
          Nov 25, 2016 at 4:41 am
          Everyone must see themselves first, what was their economic condition in 1991 and today (2016), during this 25 years period, Dr Manmohan Singh was FM (5 years) and as PM (10 years). His policies have uplifted ovre 300 million indians from Below Poverty to Above Poverty and as Middle Cl. Corruption exists irrespective of Political Party in Power. Is Reliance (Mukesh and Anil) and Adani honest businessmens? They existed even during Congress and now with BJP. Corrupt thrive in all governments as Bureaucracy is favouring these people at the cost of ex-chequer. Let Mr Narendra Modi implement and people will experience the benefit of demonetisation in 2017, if for some reason fails, then he should take blame for the decisionn.
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            gagan
            Nov 25, 2016 at 6:39 am
            u nailed truh very well..be ready to face illitrate bhakats
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              sivakumar
              Nov 25, 2016 at 5:46 am
              he has others already (meaning duties !!!) ... so why disturb him, there are other chamchas of scamgress ... who are fit enough only for these .... and they have doctorates in this game ....
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                sivakumar
                Nov 25, 2016 at 5:45 am
                was he the only Ex RBI Governor ??? Was he the only EX-PM ??? Will you listen to Mr. Devagowda (where ever he is) and do accordingly - since he too was an EX-PM ????And will you give any more time to listen to Ex-FM Chidu .... even his son do not listen to him .... do you know he opened more than 20 ATMs for such a small city Sivaganga - where the need was only for 3 or 4 ???Can anyone watch Ex-PM's Speech ever ??? Did you watched his earlier speeches of MMS when he was the servant-PM of India for 10 years ...Could you even remember Ex-President Mrs. Pratiba Patel ??? What was her qualification to become President of India !!! ... and what is that of dog iyer, and others - all...All Scamgress was giving in the 60 years of their rule was - Substandard Environment, Mindless Governing, Supported Scams, anti-indian ways ... and what not !!!
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                  Chinmayananda Padhy
                  Nov 25, 2016 at 4:51 am
                  Because he became the part of most tainted political system of India...Who talks about congress here???who denies that congress was one of the most corrupted party lead by ms. sonia hi???DO BJP is corruption free...do BJP don't have scams to their credit as well...what more scam you will find in Indian history than Vypam, where more then 60 witnesses got murdered including few journalist...so friends lets not count the list of scams for any political parties in India...why I support MNS, because I have seen his strong policy outlook and action during the most critical time of Indian economy during 1991.I have seen several his projects to be implemented being hizacked by modi ji...He was silent but did lot for Indian economy even with exteme political adverseries even from his own party....SO LET'S NOT DEMEAN HIS GREAT CONTRIBUTION TO TODAYS INDIA....WHEN YOU WILL TALK ABOUT FAILURES OF MNS, THEN YOU CAN ALSO TALK ABOUT MANY FAILURE BY MR MODI AS WELL...IF YOU STILL RESPECT HIM DUE TO HIS OWN INTEGRITY, THEN WHY NOT REPSPECT A PERSON WHO HAD ASLO MAINTAIN HIS PERSONAL INTEGRITY THROUGH OUT HIS CAREER...
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                    Chinmayananda Padhy
                    Nov 25, 2016 at 4:28 am
                    Do you thing PM Mr modi is good at implementation...then why so so much confusion to deal with demonization...why such hue & cry every where...Let say demonization is good, then why he didn't allowed to print enough rs 100 & 500 before making this declaration??if printing of 2000 notes was not hampering his secrecy, then why printing of 500 and 100 would have hampered his secrecy? If he was so well prepared since last 10 months, then why changing norms every day...already 45 times he has changed the norms since 8th Nov..DEAR FRIEND COME OUT OF WHATSUP POSTS ONLY AND GO TO THE STREET, VILLAGES AND TALK WITH BANK MANAGERS, TRADERS THEN TALK WITH ME....I DIDNT HAVE ANY BLACK MONEY BUT WHY I MADE TO SUFFER FOR HIS ILL PLANNING...YOU CANT EQUATE FAILED IMPLEMENTATION PLAN WITH DESH BHAKTI AND GET ESCAPE FROM THE RESPONSIBILITY...
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                      Chinmayananda Padhy
                      Nov 25, 2016 at 6:15 am
                      GOOD MORNING....JOINED THE ARMY OF TROLLS.....WHY SO LATE TODAY..HAVE YOU GONE TO ATM???NOW START YOUR JOB ....USE WORST SLANGS FOR ALL SO THAT EVERY ONE WILL OUT OF THIS DISCUSION EXCEPT YOU S TROLLS
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                        Chinmayananda Padhy
                        Nov 25, 2016 at 6:10 am
                        HAVE YOU REALLY FORGOTTEN OR IMPOSED TO FORGET...IF YOU REALLY FORGOT THE PAST VERSES, GO TO SOME NATIONAL LIBRARY AND PICK UP THE NEWS PAPERS FROM 2012 TO 2014, YOU WILL BE BETTER CONVINCE WITH MY CLAIM...OK YOU EVEN CAN DOWN LOAD THE E-PAPERS FROM ANY REPUTED NEWS PAPER AGENCY....JUST SEE MY PREVIOUS POSTS FOR THIS NEW ITSELF, NEITHER I SUPPORT MODI, NOR I SUPPORT CONGRESS NOR I SUPPORT JEJRIWAL....I JUST TRY TO SHOW THE MIRROR TO PRESENT LEADERSHIP...JUST A HINT....SAME MODI WAS BEHIND PARALYSING GST AND FDI, PAK DIPLOMACY...AND HIGHLY CRITICIZING THE THEN GOVT...LOOK FOR HIS WORDS....HOW HE IS DOING THE SAME...AGAIN IF MAUN SINGH IS NOT ABUSIVE, THEN WHY FEEL FEKU IS ABUSIVE...YOU CANNOT CREATE YOU OWN DICTIONARY OF ABUSIVE AND NOT ABUSIVE
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                          Chinmayananda Padhy
                          Nov 25, 2016 at 4:15 am
                          The person who learned to respect others, obviously deserves respect...the same person Mr modi was using abusive languages against the then PM, may be for his failure in governance or scams etc, when he was CM of Gujrat...THEN, WHY WE CANNT USE FOUL LANGUAGES AGAIST HIM WHEN HE IS FAILING OR DOING MISTAKES IN GOVERNANCE. WHY EVERYONE WAS ENJOYING WHEN RESPECTED MR MODI WAS PLAYING THE ROLE OF KEJRIWAL JUST 3 to 4 YEARS AGO AND HAD INVENTED INSULTIVE LANGUAGES SUCH AS MAUN SINGH AND LOT MANY AGAINST THE THEN PM
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                          1. Shivanand Rahul
                            Nov 25, 2016 at 4:33 am
                            Maun Singh is not abusive language however showing dis respect using his name. If he is so knowledged why so many scams happened during his regime. That's why he is Maun singh. And modi is never a Kejriwalis. Don't even compare with him.
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                              VivekDubey
                              Nov 26, 2016 at 12:20 am
                              Great efforts
                              Reply
                              1. Ganesh Bangalore
                                Nov 25, 2016 at 6:31 am
                                25-11-2016 I am a common senior citizen not connected with any political parties. I also during my high school days partited in the freedom struggle. Whatever promised during struggle and a few years after has been forgotten by the politicians and they concentrated in their growth and prosperity by any means and all means. This has given room for corruption dividing the people based on caste and religion only to enjoy power and am wealth. This has given room for too many politicians and parties. This has given room for too much of black money and corruption. Present government headed by Modi is trying to reduce corruption and common people have to struggle to see the result. For this all other parties are protesting instead of supporting for attacking and reducing corruption. If corruption increases poor will have to suffer. B S Ganesh BANGALORE
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                                  Ganesh
                                  Nov 25, 2016 at 3:57 am
                                  It is monumentally unfortunate that MMS’s is allowing his legacy as economist to protect the interests of corrupt parties like Congress, SP, BSP, TMC, RJD and AAP to misguide countrymen.
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                                    Govind
                                    Nov 25, 2016 at 6:00 am
                                    The w world was talking about scams in UPA 1and 2. But your opinion is strange. UPA was involved in scams, so BJP should not be criticized. Because UPA had scams BJP has a right to torment the people of India. Are you a fake degree holder?
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                                    1. Felix Luis
                                      Nov 25, 2016 at 6:22 pm
                                      .......1934, 1938, 1945, 1946, 1954, 1967-69, 1972, 1975, 1978, 1980(Truth Statement) 1981, 1987, 1996, 2001, 2005, 2006. These are the Years of ebb/flow demonetization and hardships the Indian people had/have/are enduring.......Please! Ask yourselves does monetization work! Especially ill planned, conceived, non staged approach!
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                                      1. Felix Luis
                                        Nov 25, 2016 at 6:12 pm
                                        .....By the way; "his", "Trump" is addressed Mr. Trump, President Elect Trump or Sir!
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                                          Gopal
                                          Nov 25, 2016 at 4:07 am
                                          If MMS is so educated, why did so many scams occur during his 10 year regime?
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                                            jaynarayan
                                            Nov 25, 2016 at 9:07 am
                                            Many discussion on MMS since he has started to speak (thanks to PM MODI for making him to say something). Swamy has good allegory to understand the position of MMS in cong party. MMS is actually SINGH, but a singh in a hand of ring master of sarkash. I am not a economist, but by the oppositions stand I could understand the demonetization move is good for this country. The 2% GDB is because of the decrease in demand due to shortage of cash. This can be alleviated by many other means. Govt. has already taken many measures, and surely by mid of December things will settle. Hope for the best. We are in support of Demonetization.
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