Economy

Banks must pass on the benefits to consumers, says Anurag Thakur

Shishir Sinha/Richa Mishra New Delhi | Updated on September 26, 2019 Published on September 25, 2019

Wealth creators must also be respected as they have a crucial role in making India a $5-t economy, says MoS Finance Thakur

Minister of State for Finance Anurag Thakur feels that “Critics’ job is to criticise” and that the government has been bold enough to take decisions immediately after the Union Budget to address the issues challenging the economy.

On concern over transmission of policy rate cuts and other banking sector reforms, in conversation with BusinessLine Thakur said, “We had a meeting with the public sector banks to convey a clear message that benefits should reach (the consumers) at the earliest. And we are having a meeting on Thursday with the private sector banks for the same.” Excerpts:

How do you see the economy progressing?

If you look at the measures taken by the government, after meeting all the stakeholders, especially immediately after the Budget session, it shows our commitment. The government was open to consider the opinions of various stakeholders, whether it was industry, traders or consumers. And we have not taken much time to consider and take decisions on them one after another.

We had six press briefings and made public the decisions taken by the government. This clearly shows the government is listening and acting as well. So, all these steps are taken to boost growth and investment.

But, there is a section which feels that the government is late in reacting…

Critics’ job is to criticise. But, the point is that immediately after Parliament session, not only did we meet the stakeholders, but also reached out to the officials from income tax, GST and Customs departments, and conveyed our message loud and clear. The message was we must respect the wealth creators of this country, who will play an important role in making India a $5-trillion economy.

Till the time we don't have substantial proof to send a notice we shouldn’t suspect them. There has to be a change in mindset. There has to be ease of doing business, a comfort level among the business community to put in more investments for their personal growth as well as the economy.

How easy was it to convince the Prime Minister about the measures to be taken, as there are many voices emanating from even within your own party?

When you have a decisive Prime Minister, things becomes much easier. The PM is known for his development model. And if you look at the last five years, not only has there been growth and development, but at the same time, there was not even a single corruption case. We grew at an average of 7 per cent. The fiscal deficit has come down drastically. We have been able to achieve our targets. Inflation was under control in the last five years.

It all happened because we had a leader who got a clear mandate and had a clear vision. This helps to take big decisions — GST, demonetisation, abolition of article 370, banning of triple talaq and now corporate tax rate cuts. Howdy, Modi event also shows to what level he has taken India.

ADB has lowered its growth projection for India by 50 basis points. Many other agencies have also cut their growth projections. Do you share their pessimism or are you optimistic?

We have initiated measures that will help us to get more investment and a better growth in the coming months. Also, if you look at various other parameters, India has done amazingly well in the last five years. I don't see any reason why we should not surprise many who are giving these targets for the Indian economy.

The government is proactive and taking decisions one after another. And Friday’s decision (Corporate tax rate cut) has helped change sentiments.

There is debate going on — slowdown versus recession. What is your view?

I leave it to the media to name it. Our entire focus is what government can do, whether it is corporate rate cut or handholding for MSMEs or even reforms in the banking sector. We decided on bank amalgamation and also capitalise public sector banks with ₹70,000 crore. Now, to ensure this the benefits common man, there will be loan mela across 400 districts in October. All this is to ensure that money is reaching out to NBFCs, to industries, to entrepreneurs and to the common man as well.

Also, we are attending to the sectoral woes too. Take the example of automobile, we lowered GST on EVs, hiked the depreciation rate and now new interest rate mechanism will be in place from October. This new mechanism is likely to bring down the interest rate on auto loans. All these measures are for the betterment of the economy.

Is fiscal deficit a challenge? Corporate tax reduction means ₹1.45 lakh crore revenue forgone. Now overall direct tax collection and GST collection are below the Budget estimate. How will the gap be bridged?

You may be looking at just one picture of fiscal deficit. But, see we have not revised it. If you look at the past also, we were well within the range of the targeted fiscal deficit. If you look at many other developing countries, look at their fiscal deficit, where do they stand with the kind of investments then? So, I think you have to balance it out.

We believe what we give as a target, we have to achieve it. A country like India with a 1.3 billion population, you need more investment and growth to have more employment and job opportunities. Growth and investment are very important. Once they go hand in hand, I think hundreds of problems will get solved.

Talking about investments, big private companies are still shy of making any investment-related announcement; are you still optimistic? Also, do you think that consumer sentiments will be better this festival season?

Of course, yes, I believe the decisions taken and measures to ensure that money reaches to the grassroots level, we will again have a better consumption, which will lead to the more growth.

On the first part of your question about investment plans not announced by the biggest Indian private sector company, let me tell you that it has just been four days since the corporate tax announcement was made and trust me, you should not look at one entity.

I see a lot of possibility from the US-China trade war — billions of dollars investment are going to move out. We are looking at them. We are looking at options within Asia and the South-East Asia. With the kind of corporate tax rates and more predictable tax rate for the coming years, we have become a more attractive destination for them. So, why look only within India, but look at outsiders also investing here. The two will be investing together.

What is the status on Bharat Petroleum Corporation Ltd disinvestment plan?

Once we take a final decision on any company, we will update you. But let me say this, we have set a disinvestment target of ₹1.05 lakh crore for this financial year, and we will be able to achieve that.

Why is the government once again proposing to amend the Companies Act?

The new Companies Act came in 2013. It looks like it was brought in a hurry. And many amendments have been brought in to that. And if the situation arises and demands to bring in more changes, as far as the ease of doing business is concerned, I think the government should not hesitate to bring those amendments. Overall, we want to create an eco-system which should be industry-friendly, make them more responsible and accountable as well.

Published on September 25, 2019
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