New Delhi: The Narendra Modi government is not ruling out further measures to support the economy battling the Covid-19 pandemic but the measures will depend on “how it (the pandemic) develops”, Finance Minister Nirmala Sitharaman said.
In interviews to The Indian Express and business dailies Mint and Business Standard, Sitharaman also said monetisation of deficit is one of the options to finance the deficit but the government has not taken any decision on the matter as yet.
“I am not ruling it out. I have to see how it (the pandemic) develops as we go further,” she said in her interview to Mint responding to a question about whether the government is planning more support measures.
“I kept saying that I have to be ready even as I go because no one knows how this is going to turn out, how this is going to end, how this is going to withdraw. So obviously, I have to be ready, I can’t finish my story with these announcements,” she told The Indian Express, when asked if the government was planning to spend more in the future.
Sitharaman acknowledged the industry’s demands for more sops but said the government took the decision based on what it thought was best, adding that the government had announced massive cuts in the corporate tax rates only last year.
“As we go along, whatever needs to be done, we are willing to do. We have to see as we go along, how industry is moving on, how people are responding, how the economy is responding. I can’t shut any door. We have to be alive to the problem,” she said, in her interview to Business Standard.
She added that her message to the industry is that the government is with the industry. “We know that they are going through a very stressful time, like never before. We are here to extend as much help as we can,” she said.
Too early to talk about sovereign bonds: Sitharaman
Sitharaman ruled out a special Covid-19 budget and said all the revenue and expenditure numbers will be revised at the time of the revised budget estimations.
She agreed that the government’s borrowing costs from the domestic market has gone up but said it might be too early to talk about sovereign bond issuances.
Responding to a query on why the government did not opt for cash transfers to migrants, Sitharaman talked about how the government has looked at providing collateral-free loans to micro, small and medium enterprises (MSMEs) so that they can pay wages.
“Yes, it’s a loan, it’s a credit. Yes, it’s not a grant. But that’s where I am asking, grants for how many, of how much?,” she said.
Also read: Every announcement Sitharaman makes does not qualify as reform. There is repackaging too
The messaging could be better. Twenty trillion – I always convert these figures into $ billion, which are more comprehensible – created a buzz that lasted only for a few hours. Then the numbers were parsed. India’s stimulus package is worth $ 20 per capita. Neither the markets nor the poor are impressed. We are in a financial emergency, whose contours will be thrown into sharper relief after the pandemic subsides. Skating on thin ice with the rating agencies. With the fiscal deficit and growth being where they are likely to be, Sovereign bonds ka toh sawaal hi nahin uthta.