New Delhi: Finance Minister Nirmala Sitharaman Tuesday said green shoots are visible in the Indian economy as she looked to dismiss opposition’s concerns.
In a reply in Lok Sabha during a discussion on Union Budget 2020-21, Sitharaman elaborated the steps taken so far by the Narendra Modi government to promote investment, consumption, exports and job creation.
Striking a confident note, Sitharaman said, “The green shoots in the economy and the steps taken by the Reserve Bank of India (RBI) will help the economy move forward.”
Last week, the RBI announced steps to lower lending rates for home and auto sectors while providing relief to stressed MSME and real estate sector accounts.
Sitharaman listed out improvement in foreign inflows, industrial performance, forex reserves, performance of the stock markets and tax collections under the goods and services tax (GST) as visible green shoots.
The finance minister’s statement comes at a time when the Indian economy is forecast to grow at an 11-year low of 5 per cent in 2019-20 before rebounding to grow at 6 per cent in 2020-21.
“Global sentiments are in favour of India and India continues to attract foreign investment,” the finance minister said, pointing out that net FDI flows into the country were $24.4 billion in April-November 2019 as against $21.2 billion in the same period in the year-ago period.
Sitharaman added that net FPI inflows were at $12.6 billion during the period as against $8.7 billion in the year-ago period.
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Secondary markets continue to be upbeat, the FM said, pointing out that BSE Sensex was up 5 per cent as of January 2020 as against the levels as of March 2019.
Manufacturing and GST
Assuaging concerns on the slowdown in the manufacturing sector, FM Nirmala Sitharaman said industrial activity is on the rebound.
Index of industrial production (IIP) turned positive for November 2019 as against a contraction in the previous months, said the FM, adding that purchasing managers index (PMI) is also steadily improving and was at 55.3 in January from 51.2 in November.
The GST collections are also improving pointing to increasing economic activity, she said. Monthly collections are also registering a year-on-year growth, she added.
“We are on a positive growth trajectory after negative collection growth in September and October,” added the FM.
Sitharaman said the rise in forex reserves to $466 billion in January 2020 from $413 billion as of March-end reflect the increasing confidence of overseas investors in the Indian economy.
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