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Guiding the contours of post-pandemic recovery of the economy has preoccupied the ruling BJP in the run-up to the Union Budget. The party held prolonged parleys with the Finance Minister Nirmala Sitharaman on January 16 and is now in the process of compiling responses from different State units and stakeholders to be submitted to the FM.
Gopal Krishna Agarwal, BJP’s Economic Affairs spokesperson, has been at the helm of these discussions. He talks about why the recovery of the informal sector is the government’s prime concern and the steps that the Centre needs to take to boost demand, besides other issues that have been discussed in the internal meetings, in an exclusive interview with BusinessLine. Excerpts:
If you could pick one sector as your prime concern, what would it be?
We are very concerned about the informal sector. While there is an appreciation for post-pandemic economic recovery, we need to simultaneously address the challenges. The informal sector has taken a big hit. The consensus is that this sector needs support from the government. Steps need to be taken for ensuring credit availability for the MSMEs.
Measures such as the credit guarantee scheme for subordinate debt for MSMEs, NBFCs’ recognition of NPA and related issues are positive steps. We also need to focus on the working capital requirements on MSMEs. We believe harassment by investigating agencies should be looked at. All of these have been conveyed to the Finance Minister and we would be giving out written submissions as well.
What are the other issues the party would like the government to focus on?
The consensus among stakeholders, academicians, economists and people associated with the party was that the fiscal consolidation path should not be very steep.
It would boost investor confidence if the government comes out with a clear fiscal consolidation path for the medium term which is not very steep and there are no major fluctuations.
Also, we felt that the GST stabilising around an average 11-12 per cent rate is a good thing but there is still concern about invisible taxation. We believe that individual taxation is still very high in the upper layer.
Was there a sector-specific discussion?
Some sector-specific issues were flagged. A number of our State units are concerned about the stress on the tourism and hospitality sector and were of the opinion that theyneed attention.
Also, we believe that the cost of raw materials and base metals including steel, iron ore, aluminium, copper, plastics and paper is very high.
The industry has been facing massive challenges on account of the rise in these prices; it erodes their working capital. Also, the rationalisation of inverted duty structure and deduction in import/customs duties was discussed.
The BJP has benefited from the welfare model followed by the Centre. In an election year, was there any suggestions from the party on this front?
We believe that a lot of central welfare schemes are not implemented properly especially in States ruled by the Opposition parties. We have all seen what happened in West Bengal where PM Kisan was not being implemented. If we can ensure direct cash transfers, it would benefit the people.
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