The top brass of the Ministry of Finance on Tuesday gave a presentation on the state of the Indian economy and the plan ahead, including measures and projects the government is undertaking to try to improve the state of affairs. They made a number of announcements, including on a capitalisation plan on public sector banks, an ambitious road development project and border and port connectivity.
Finance Minister Arun Jaitley opened the press conference saying that India was still a high-growth economy. “India has been the fastest growing economy for the past three years,” he said. “We have been able to remain a high-growth economy. Structural changes come with consequences, but they have medium- and long-term gains.”
Secretary of the Department of Economic Affairs Subhash Chandra Garg, Finance Secretary Ashok Lavasa and Secretary of the Department of Financial Services Rajiv Kumar gave three presentations.
Here is what was said at the press conference:
5.58 pm: In sheer quantum, capital expenditure has increased, says the finance minister.
5.45 pm: Infrastructure instantaneously creates jobs, and lending to MSMEs does too, says Arun Jaitley.
5.43 pm: There is no authentic data on job losses or creation, says Arun Jaitley. “It is not right to announce an approximate figure,” he says. “The private sector and MSMEs need to be pushed to generate employment.”
5.41 pm: Arun Jaitley says the government will announce a set of banking reforms in the next few months.
5.40 pm: The Finance Ministry will adopt a differential approach in utilising the amount allocated for the capitalisation of public sector banks, says Rajiv Kumar. He says performance and potential will be factored in.
5.37 pm: The rate of registration for the Goods and Services Tax is very encouraging, says Arun Jaitley. He says the number of registrants had risen 30% to 35% in the past three months, but the transition process is still on.
5.35 pm: The government has been consistent in its efforts to boost infrastructure expenditure and has had a consistent policy on fiscal deficit and fiscal consolidation, says Arun Jaitley. He emphasises that there is no embargo on disclosing the names of wilful defaulters. “The names are available for the public,” he says. “There is no veil of secrecy. Banking laws prevent giving details of accounts of legitimate customers. Both names and photos of wilful defaulters can be published.”
5.31 pm: The entire Rs 2.11 lakh crore capitalisation plan for public sector banks could be spread out over two years, says Arun Jaitley.
5.28 pm: We factored in infrastructure spending in the fiscal deficit, says Arun Jaitley.
5.27 pm: Chief Economic Adviser Arvind Subramanian says these measures could boost confidence in the economy.
5.23 pm: Public sector banks have adequate lending capacity post demonetisation, says the finance minister.
5.20 pm: Arun Jaitley says there is a need to increase public spending, and measures taken today will greatly boost spending on infrastructure.
5.18 pm: The state of public sector banks became transparent after scrutiny, says Arun Jaitley.
5.15 pm: Arun Jaitley says public sector banks made indiscriminate lendings at one stage. He says a big chunk of those lendings are non-performing assets today.
5 pm: Rajiv Kumar says public sector banks will catalyse private investments.
4.58 pm: Secretary of the Department of Financial Services Rajiv Kumar says the Cabinet has approved an “unprecedented” public sector bank capitalisation plan of Rs 2.11 lakh crore.
4.52 pm: The Department of Economic Affairs Secretary says slowdown of GDP growth has bottomed out and the economy is turning around. He maintains that all indicators point towards a Gross Domestic Product that is “poised for take off”. He acknowledges that India’s GDP growth has dropped, but says it will be back on track soon.
4.50 pm: Secretary of the Department of Economic Affairs Subhash Chandra Garg highlights low inflation numbers, declining current account deficit, steady fiscal consolidation and rising foreign exchange reserves indicating greater global trust in India. Garg says he is confident the disinvestment target for this year will be achieved.
4.45 pm: Lavasa announces a plan to improve coastal port connectivity and one for border areas. The first phase of the 3,300 km border project will cover 1,000 km of roads.
4.40 pm: Finance Secretary Ashok Lavasa announces the government’s ambitious Bharatmala Phase I project. He says the Centre will develop new roads to Nepal and Bhutan, and announces that around 2,000 km of coastal roads will be constructed.
This is the Road Transport and Highway Ministry’s biggest ever highway development plan, which involves the expansion of 83,677 km of road by 2022 with an investment of Rs 6.92 lakh crore.
4.32 pm: He says, “India has been the fastest growing economy for the past three years. We have been able to remain a high-growth economy. Structural changes come with consequences, but they have medium- and long-term gains.” He adds that detailed meetings were held with Prime Minister Narendra Modi on the economy and that the government has decided on the steps needed to sustain the momentum of growth.
4.30 pm: Jaitley opens the press conference. He recalls his statement from September, when he said India would be ready to respond to any international development.
India’s economy
India’s GDP growth fell to a three-year low of 5.7% in the first quarter of the 2017-’18 financial year. Global agencies such as the World Bank, International Monetary Fund and Fitch Ratings all downgraded India’s growth forecast after the figure was released. The government’s demonetisation exercise and the implementation of the Goods and Services Tax were blamed for the economic slowdown.
In recent days, the government has been pilloried not only by political opponents from the Congress – including former Prime Minister Manmohan Singh, former Finance Minister P Chidambaram and Congress Vice President Rahul Gandhi – but also by senior Bharatiya Janata Party leaders such as Yashwant Sinha and Arun Shourie.