G20 FMs meet: Sitharaman calls for structural reforms to deal with global slump

By: |
Published: October 19, 2019 4:01:40 AM

Apart from the tax cut, the Modi government has undertaken structural reforms like the goods and services tax (GST) and the Insolvency and Bankruptcy Code (IBC), which it wants to tweak further for meaningful impact.

G20, FM meet, Sitharaman, nirmala Sitharaman , structural reform, global slump, economy news, goods and services tax, GST, Insolvency and Bankruptcy Code, IBC, Finance minister , g20 nation Finance minister Nirmala Sitharaman at a meeting with World Bank chief David Malpass (left) in Washington DC (PTI)

Finance minister Nirmala Sitharaman called for concerted action among the G20 industrial nations as well as another wave of reforms to reverse the ongoing global economic slowdown, the government said in a statement on Friday. Speaking at a meeting of G20 finance ministers and central bank governors in Washington, Sitharaman “emphasized the importance of countries pursuing structural reform measures to counter the growth slowdown”, in a subtle indication the government may be willing to undertake further reforms, as a consumption-led growth deceleration deepened. She pitched the recent decision to cut the standard corporate tax rate sharply to 22% from 30% as a great structural reform, asserting that the move made the country one of the lowest tax-imposing nations that would help spur investment.

Separately, talking to Indian reporters, the minister said trade differences between India and the US had been narrowing and hoped for a deal soon. “I know the intensity with which the negotiations are going on and a few issues on which they could be some differences are being sorted out. I hope there will be an agreement sooner,” she said.

Apart from the tax cut, the Modi government has undertaken structural reforms like the goods and services tax (GST) and the Insolvency and Bankruptcy Code (IBC), which it wants to tweak further for meaningful impact.

Sitharaman also highlighted Aadhaar-based direct benefit transfer (DBT) and the universal healthcare policy.  Reinforcing fears of a protracted growth slowdown, the International Monetary Fund recently cut its India growth forecast to just 6.1% for 2019-20 from 7% predicted earlier. Similarly, it trimmed its global growth forecast for 2019 to 3% from 3.2% in July. Despite the downward revision, India remained one of the world’s fastest-growing economies, she said.

The minister said she wasn’t, at this stage, “looking at how long” the slowdown would last, but was looking at green shoots. At this stage, it is “my duty is to hear every sector and respond as much as they would want us to respond from the government side”. “So, my business is now just to go on listening and making sure that the grievances or their demands are addressed.”

Asked if the slowdown of the Indian economy is cyclical or structural, Sitharaman said she wasn’t getting into that question at the moment.

Several other key indicators have shown signs of weakness, apart from GDP growth collapsing to just 5% in the June quarter. Industrial output shrank the most in 81 months in August; non-food credit growth hit just 8.7% in the fortnight through September 27, the first single-digit rise since December 2017; and exports contracted 6.6% in September, the third contraction in six months.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1India’s forex reserves at new life-time high of $439.712 billion
2Abhijit Banerjee is ‘Left-leaning’, his NYAY was rejected by people: Piyush Goyal
3India’s cotton imports rise to 2.3 million bales till August