Govt’s reforms have been transformative: Sitharaman

Prime Minister Narendra Modi’s three sutras for government functioning: Na abhaav (no inadequacy in governance), Na dabav (No pressure from excessive government) and Prabhav (Facilitation) — will be guiding spirit to reach the $5-trillion economy, said Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs.

She was delivering an address, “Road map to $5 trillion economy” at the Nani Palkhivala Centenary Celebrations organised by the Palkhivala Foundation here on Sunday.

“So you should neither have a shortfall (in governance) or pressure from a (excessive) government. Therefore, the route to $5-trillion economy is that government should be there as a facilitator and make it easy for the business to function,” Sitharaman said.

She added that the government has delivered transformative changes (and not incremental ones) to ensure a rapid growth in its economy.

GST, Insolvency and Bankruptcy Code (IBC) and demonetisation are some of the transformative measures taken by the Modi government, she added.

Sitharaman said that the criticism that the Centre was unable to get the State governments on board in passing the much-delayed Land Acquisition Act does not hold true since the same government has handled the Goods and Services Tax (GST) effectively, where the support of all State governments were required.

On IBC, Sitharaman said the spirit of the process in resolving cases quickly was questioned so the government has to bring in amendments even in the middle of last budget session to clear the grey areas and ensure greater clarity.

She also said digitisation of India is a “collateral benefit” of demonetisation.

“India is today the leader in digital payments. All major economies want to learn how to digitise from India,” Sitharaman. Formalising a large part of the economy is critical for a $5-trillion economy, she said.

The Finance Minister also added that bankers’ fears are being addressed so that they do not hold back giving credit. There is nothing for them to fear as long as they are proper business decisions.

Responding to the recent statement made by Tata Group Chairman N Chandrasekaran that government should trust business people, the Finance minister said through decriminalisation of Companies Law and other laws like Income Tax Act or Prevention of Money Laundering Act (PMLA) the government is trying to address the trust issue.

“We do not want a law which is going to treat every business with suspicion and that’s not the intent of this government. We are planning to make the path to $5-trillion economy a lot easier and a lot more matter of trust between the government and businesses,” Sitharaman said.

On criticism that the government is addressing only the supply side while the demand side appears lukewarm, the Finance Minister highlighted the ₹100-lakh crore earmarked for infrastructure for not just roads but also for agriculture, food processing and energy infrastructure.

“So once the money goes to the hands of people, who need it, asset is created and because of the asset creation the country is benefited both in the medium and short term,” Sitharaman said.

She also added that the government has implemented specific action points for non-banking finance companies (NBFCs) sector which is the last mile connectivity to the consumer.

“The partial guarantee which the government has given for pooling the assets is essentially towards making sure that NBFCs survive with the liquidity that they want and with that they are able to give credit to those in rural areas so that consumption increases and the demand side is addressed,” she added.

She also released a book containing Selected Speeches from the Palkhivala Memorial Lectures 2003- 2019.

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