According to the minister, the steps announced in the budget have been resulting in ground-level changes.
As the Central Statistics Office (CSO) said on Friday the country’s gross domestic product (GDP) grew at a 25-quarter low rate of 5% in April-June with private consumption and manufacturing faltering the most in a rather broad-based slowdown, finance minister Nirmala Sitharaman on Sunday said the government was responding to the issues confronting the economy “sectorally”. Outlining the government’s approach, she asserted that, “every sector of the Indian economy, when it approaches us, we (the government) hear them out for solutions that they want and we respond to it”.
She was addressing mediapersons here after a meeting with the officers of the Customs, goods and service tax and income tax departments. Asked what was her message to people who had lost their jobs and those fearing job losses, Sitharaman said, “I can only say we are responding to the industry requirements. Across the board, there is no one particular answer that I can give, saying this is the magic wand. Sectorally, what they want, we are responding,” she said.
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On the apprehensions of huge job losses — the National Sample Survey Organisation’s (NSSO) first annual survey on employment had indicated that joblessness in the country rose to a 45-year high in 2017-18 with the unemployment rate among the labour force at 6.1% — the minister said, the country’s official jobs data always concentrated on the formal sector only. This, she said,was the case even before the first Narendra Modi government came into power in 2014 and the period after it.
“Indian informal sector employment has not been appropriately or exhaustively documented. When we are referring to data from the government organisations like the NSSO, it talks only about the formal sector and not about the informal. In India, the nature of our economy was that it is in the informal sector where majority of our employment is. If there is stress in the respective sectors, I am willing to hear,” she added.
According to the minister, the steps announced in the budget have been resulting in ground-level changes. These included the liquidity issues of the lenders (especially the shadow banking space) and the consumers.
Consultation has been going on for sectors, including agriculture, for which the government will be coming out with responses, she said. Overall the government feels that the monsoon would meet the requirement for agriculture.
She, however, admitted that in the automobile sector, there are issues related to piling up of inventories and sharp decline in sales of vehicles. The automobile-industry issues had different aspects including that the customers might be waiting a time closer to the BS-VI introduction so that there would be more discounts, the minister said, referring to what the industry told her. Besides with the push to the electric vehicles, there were confusion on what will happen to the BS-IV, BS-VI vehicles. “Most of these issues need government response and we are responding in phases as they come. GST rate reduction has to go to the GST Council and it will decide soon,” she added.
Sitharaman allayed fears of job losses following the proposed merger of public sector banks, saying that not even one employee would be removed following the amalgamation. “Absolutely, ill informed. I want to assure every union in every one of these banks to please recall what I have said last Friday. When we spoke about amalgamation of banks I have very clearly underlined the fact that there shall not be one employee removed. Not at all,” she said. There would not be any closure of banks and no bank was being asked to do something new.
The minister’s remarks are against the backdrop of global agencies cutting global and India’s growth outlook and grim prognosis by many noted analysts of the India’s short-term growth prospects. The RBI said in its annual report 2018-19 last week, “The recent (growth) deceleration could be in the nature of a soft patch mutating into a cyclical downswing, rather than a deep structural slowdown. Nonetheless, there are still structural issues in land, labour, agricultural marketing and the like, which need to be addressed.”
The government has been in consultation with various sectors and Sitharaman came out with two tranches of announcement during the last two weeks.
On August 23, she announced a raft of measures to boost the economy, including upfront capital infusion of `70,000 crore into public sector banks to ease credit flows. On Friday, she unveiled a complementary plan to merge10 public sector banks into four, with the apparent objective of creating fewer and stronger global-sized lenders with stronger balance sheets and lending capacity.
Separately, the government also liberalised FDI norms last week in sectors like commercial coal mining, contract manufacturing and single-brand retail. (With PTI inputs)