Indian economy hasn't reached level of easing of liquidity: FM at CII event

There are indicators which suggest that the economy is buoyant and recovery is taking place post lifting of Covid restrictions by states, says Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Thursday assured India Inc that the government is ready to do everything required to revive and support economic growth.

There are indicators which suggest that the economy is buoyant and recovery is taking place post lifting of COVID-19 restrictions by states, she said while addressing the CII Annual Meeting 2021.

She further said foreign direct investment has seen a growth of 37 per cent so far this fiscal, while forex reserves increased to $620 billion as of July.

The Narendra Modi government has shown commitment to reforms even during the pandemic, she said, adding last year the Centre announced farm laws and labour reforms, among others.

She also exhorted the industry to come forward and invest in the economy.

Indian economy has not reached the level where Reserve Bank of India can begin pulling back liquidity as Asia's third largest economy is still recovering from the shock of two major waves of coronavirus, Sitharaman said on Thursday.

"I am glad that RBI understands that quicker retrieval of the liquidity from the economy may not do the necessary things to win," Sitharaman said at the virtual conference.

"They have not given any indication about wanting to suck out the liquidity that is available there," she added.

She said while India will take measures to contain inflation, growth will be a priority in the current environment.

Sitharaman said that the government is undertaking all the "necessary rigorous" work to complete the planned privatisation processes by the end of this financial year.

Speaking at the CII annual conclave, Sitharaman said: "Our commitment to disinvestment and privatisation is firmly ingrained in policy. There is no discretion and there is a calendar."

The government has set a target to complete the privatisation of Air India and BPCL, among other state-run companies and banks, in FY22.

Calling upon the industry to invest more in the country, the minister further said that it is time that the Indian industry comes out and shows its risk-taking abilities and takes decisions to expand.

She also said the core sectors' growth of about 8.9 per cent was largely because of public capital expenditure.