The government has not closed the option of a third stimulus package this financial year, Finance Minister Nirmala Sitharaman said on Monday, a week after announcing measures to boost consumer spending and capital spending.
“I have not closed the option of another stimulus package if it turns out to be, because every time we announce one, it has been after considering a lot the contributions that have come from various sectors of society. Then we sit down and sort it out within the ministry and prime minister’s office and then we take one last call. So, I have not closed the option to propose one more stimulus, “said Sitharaman at the virtual launch of the autobiography of the chairman of the 15th Finance Commission, NK Singh, Portraits of power: half a century of being on Ringside.
On October 12, the Finance Minister announced a stimulus package worth ₹Rs 46,675 crore, including incentives for central government employees to spend more on consumer durables, as well as higher capital spending for both the Center and the states. But rating agency Moody’s said the measures worth 0.2% of GDP will only provide limited support for growth, highlighting the country’s “very weak fiscal position.”
In an interview on Oct. 15, spending secretary TV Somanathan said that while nothing is planned, another stimulus cannot be ruled out. “For now, I don’t think there is anything else planned. But nothing can be ruled out. The Finance Minister has always said that we will continue to monitor the situation and react periodically when the situation warrants. So I can’t give you a commitment in any way, “he added.
When asked if the Finance Ministry will present its own projection for the contraction of GDP to the prosecutor, Sitharaman said the ministry has just started making an assessment after waiting for the first half of the prosecutor to finish. “We have many inputs that are very different from what we had in July. Maybe we have to make a statement, if we do it in public or if I do it in Parliament is one thing, but obviously, the Ministry of Finance will have to make an assessment of how it will be, “she added.
The Reserve Bank of India has projected that the economy will contract 9.5% in fiscal year 21, while the International Monetary Fund has estimated that GDP will contract 10.3%.
In response to another question, the minister said that the cabinet will soon accept a proposal to identify the strategic sectors in which public sector companies would operate, opening up other sectors to the private sector as announced as part of the Atmanirbhar Bharat package.
“It should be clearly mentioned how the Indian economy should be. This departure from the socialist baggage that we have been carrying all along, some desirable and others onerous, that will make a great change of direction and I hope that happens. “
Sitharaman said he wants federalism to get stronger. “Continuous solidity in real time is what will make this country stronger. Even the prime minister periodically mentions that every state has to develop. Even if a state is left behind, it will become luggage. Otherwise, the speed with which it wants to grow will be slowed by the pull factor of those left behind, “he added.
Among other important reforms, the finance minister said she wished that India’s education system could meet all the needs of its youth and that India could become an educational center for foreign students.
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