“I have not closed the option to come out with one more stimulus,” Sitharaman said, having announced a series of steps to spur consumer demand last week on the eve of the festive season. The report on the economy may be released as a public announcement or in the legislature, she said.
“We have now started doing some kind of assessment… We have got a lot of inputs which are very different from what we had in July and ideally it should be so,” she said.
“We will have to come up with the assessment, whether in parliament or in public.”
The RBI forecast last week that GDP will contract 9.5% in FY21.
The government would regard discarding “socialistic baggage” and opening up more segments to the private sector as a flagship reform, she said during a discussion to mark the launch of the autobiography of NK Singh, chairman of the 15th Finance Commission and a veteran bureaucrat.
In this regard, she cited the forthcoming public sector enterprises policy–which will determine which sectors are strategic and which are not—that was announced as part of the Atmanirbhar Bharat package. While non-strategic sectors will be left to the private sector, only four public sector enterprises will be allowed in the strategic sector under the policy.
“That is something which will make a big directional shift and I desire that to happen,” she said, identifying the move as one of three key reforms.
“It’s not a wish from out of the blue–work is going on on that and I would like to see the realisation of that particular first step.”
The second is the need for a more robust federal structure as a driver of growth, she said.
“We need to have greater robustness in our federal debate, federal engagements, so that India can become roaring on all the four-five engines–four engines from the point of view of the economy, the fifth, which I add, is a robust federalist structure,” she said.
Sitharaman spoke about the need for a “magical input” into India’s education system to match the training and competency needs of students as the third element.
“I want education to have a magical input coming from somewhere so that we become one of those best places for students to come and study and for Indian students to have all the opportunities to be ready for the world,” Sitharaman said.
Singapore senior minister Tharman Shanmugaratnam said the new world that’s emerging from the Covid crisis spells a huge opportunity for India.
“Global supply chains are changing, global technologies are evolving,” he said. “There’s a real opportunity now for India in the context of China plus one strategies as well as in the context of India’s own inherent potential be unleashed to become a major producer of the world in both goods and services.”
Shanmugaratnam termed India’s recent reforms as moving in the right direction. “Your production-linked incentives are off to a very good start,” he said. “There has to be momentum, there has to be a focus on implementation, because it’s not policy intent at the end of the day that matters, but implementation, implementation, implementation.”
The government last week unveiled steps to boost demand, including a festival advance and allowing central government employees to use their leave travel allowance to buy consumer goods.
Sitharaman also announced additional capital expenditure of Rs 25,000 crore and a Rs 12,000 crore interest-free, 50-year loan to states for infrastructure spending. However, industry is pinning hopes on measures such as a cut in goods and services tax (GST) to lift demand.