Fiscal Steps Taken By Government Led To Positive Growth In Q3: Nirmala Sitharaman
Nirmala Sitharaman, India’s finance minister, gestures as she speaks during a news conference in New Delhi, India. (Photographer: T. Narayan/Bloomberg)

Fiscal Steps Taken By Government Led To Positive Growth In Q3: Nirmala Sitharaman

Bookmark

Finance Minister Nirmala Sitharaman on Monday said the fiscal measures taken by the government have resulted in positive growth of 0.4% in the third quarter of the current financial year. The economy is estimated to contract by 8% during 2020-21 due to the impact of the Covid-19 pandemic.

The fiscal measures taken by government during 2020-21 have been calibrated to sustain high spending in the economy and assist in its V-shaped recovery, resulting in a positive GDP growth of 0.4% in third quarter of FY 2020-21.
Finance Minister Nirmala Sitharaman Said In A Written Reply In The Lok Sabha

The minister further said that the gradual unlocking of the economy has eased supply-side disruptions enabling inflation to decline from 7.6% in October, 2020 to 4.1% in January 2021, mainly on account of decline in food inflation.

"Lower inflation has increased the real purchasing power of the people leaving more money in their hands to spend," she added. .

Sitharaman said that the money to spend has further increased under Pradhan Mantri Garib Kalyan Yojana and Atmanirbhar Bharat packages through direct benefit and in-kind (food; cooking gas) transfers, emergency credit to small businesses and wage increase for MGNREGA workers, among others.

With regard to lockdown, the minister said the government imposed a strict 21-days nationwide lockdown from March 25, 2020, to contain the spread of COVID-19 and ramp up the health infrastructure with a view to saving lives.

"Astute management of the lockdown and subsequent unlocking along with strengthened health infrastructure was accompanied by roll out of PMGKY and ANB packages that besides saving lives also protected livelihoods and businesses. These measures, amounting to Rs 29.87 lakh crore - equivalent to 15% of India's GDP, have boosted consumer confidence as their implementation advanced through 2020-21," she said.

The Consumer Confidence Survey, January 2021, of Reserve Bank of India shows that consumer confidence has been increasing since May 2020 in respect of future expectations and since September 2020 in respect of current expectations, she added.

Replying to another question, Sitharaman said, the Cabinet Committee of Economic Affairs, in its meeting held on January 27, 2021 has accorded 'in-principle' approval for 100% disinvestment of Government of India shareholding in Rashtriya Ispat Nigam Limited also called Visakhapatnam Steel Plant or Vizag Steel along with RINL's stake in its subsidiaries/Joint Ventures through strategic disinvestment by way of privatisation.

While deciding the terms and conditions of the strategic sale, she said, legitimate concerns of the existing employees and other stakeholders are suitably addressed through appropriate provisions made in the Share Purchase Agreement.

"The state government does not have any equity in RINL. However, the state government is consulted in specific matters as and when needed and their support is also solicited in the matters that require their intervention," she said.

Strategic disinvestment of Government of India's equity will lead to infusion of capital for optimum utilisation, expansion of capacity, infusion of technology and better management practices, she added.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.