Recovery patchy; stimulus at appropriate time: FM Nirmala Sitharaman

FM Sitharaman said the government has turned the crisis into an opportunity as directed by the prime minister and has brought in several systemic reforms

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Finance Minister Nirmala Sitharaman has said that the economic recovery in the second quarter has been “patchy” so far and it is difficult to say with any degree of certainty whether the upswing would hold going forward.

Dismissing criticism that the government is unwilling to provide fiscal support to revive demand and consumer spending, Sitharaman said the government has an open mind on the issue and a decision on when to spend and how much to spend will be taken at the appropriate time.

In an interview to Business Standard, the minister said the intensity of the problem is unique and the government has been engaging with all stakeholders. However, at this point, no firm assessment has been made on the additional fiscal support.

Sitharaman said the government has turned the crisis into an opportunity as directed by the prime minister and has brought in several systemic reforms on labour, agriculture, banking sector, digitises ration cards, power, etc. “We could have easily opted for providing some succour and not do anything, but we went for critical reforms,” she said.

On the silence over the report on public sector enterprises announced as part of the Atmanirbhar package, she admitted that the matter has been pending for a long time, but the cabinet will take a view on it shortly. Whether banks will be included in the strategic list will depend on the cabinet.

The minister said it is unfair to say that the “heavy lifting” for reviving the economy has been left to the Reserve Bank of India. “I may not be seen as doing the heavy lifting, but what is important is whether my actions are making a real difference on the ground,” she said, adding she is grateful to the RBI for not confining itself to just monitoring inflation. This situation demands out-of-the box solutions and that’s what the central bank is doing.

Won’t she also like to be seen doing the heavy lifting? “Everyone has his/her own style”, was her cryptic answer.

About Amnesty International’s decision to halt India operations, Sitharaman rejected the accusations of witch-hunt. “They are repeat offenders as the United Progressive Alliance government decided to withdraw their permit in 2009. So why make noise now”? This government, she said, has nothing against civil society as is evident from the fact that there are more NGOs than schools in our country. 

On the government’s stand on the interest during the moratorium period, she said banks have also been affected by the pandemic. The other side to it is that banks will also go down if the customers go down; so it’s a tricky issue. She declined to say whether the government is proposing an income threshold for getting interest relief.