FM Sitharaman: No amount of Govt steps adequate to deal with COVID-19 impact

Union Finance Minister Nirmala Sitharaman on Thursday (December 17) said that any amount of government intervention will not be adequate to deal with the impact of novel coronavirus on the economy.

Addressing an event of the Indian Chamber of Commerce (ICC) virtually, Sitharaman said that although the economy was witnessing a revival in early 2020, the pandemic impacted the recovery. Since March, she has announced a number measures to support the economy and businesses amid the pandemic and more measures are expected going ahead. So far the stimulus measures by the government and the Reserve Bank of India (RBI) add up to about Rs 30 lakh crore.

“Even during the pandemic, our efforts to disinvest some of those big companies are going on fine. The EoIs have come in, the next stage is going on and even within this financial year. I expect DIPAM to be able to prove that they are even more actively engaging in those disinvestments for which cabinet has already given approval,” Sitharaman said while addressing the AGM of the ICC.

The Cabinet has approved strategic sale, along with transfer of management control, in over 25 public sector companies, including Air India , BPCL, Pawan Hans, Scooters India, Bharat Earth Movers Ltd (BEML), Shipping Corporation, Cement Corporation and some steel plants of SAIL.

The process of sale of BPCL and Air India is ongoing and the government has received ‘multiple expressions of interest’ in these two companies. Sitharaman mentioned that the government has taken several measures to support the economy but no amount of intervention will be adequate to deal with the crisis triggered by the COVID-19 pandemic.

The Finance Minister also said that public expenditure on infrastructure will be kept up. Citing interest of foreign investors, she said that sovereign wealth funds and pension funds are keen to come to India.

The government has set an ambitious Rs 2.01 lakh crore disinvestment target in the current fiscal. However, COVID pandemic has derailed the stake sale plans and so far over Rs 11,006 crore has been mopped up from minority stake sale in various CPSEs.

The finance minister said public expenditure will continue particularly for infrastructure and with the tax concessions that the government has doled out several sovereign funds and pension funds are keen to invest in infrastructure projects outlined in the National Infrastructure Pipeline (NIP).

"Today we are able to see with all the tax concessions that we have given, several sovereign funds and pension funds from abroad are keen to come to India, and that kind of an investment readiness explains why there is an inward FDI flow into India. Inward FDI flow into India is much, much higher in proportion than compared comparable economies, emerging economies...”

(with Agency inputs)