Nirmala Sitharaman Press Conference: Finance Ministry Officials Speak On Steps Taken To Boost Economy 

Ahead of the crucial meeting of the Goods and Services Tax Council, Finance Minister Nirmala Sitharaman on Friday said the buzz of an increase in GST rates is everywhere other than her office.

She was responding to a question on talk of current GST rates being raised to make up for the fall in revenues that has even hampered giving compensation to states for loss of revenue from implementation of the indirect tax regime.

“Buzz is everywhere other than my office,” she remarked. Sitharaman, however, did not rule out a hike in GST rates, saying her ministry is yet to apply its mind to it.

Watch the press conference here.

Revenue Secretary AB Pandey said that the government will get a fair estimate of corporate tax deduction after advance tax instalment which is due on Dec. 15.

The Revenue Secretary has said that the government has made more refund on both indirect and direct taxes this year. Total refunds stood at Rs 2.2 lakh crore till November, he said.

Bulk of those returns were for income tax, where refunds till November stood at Rs 1.57 lakh crore compared with 1.84 lakh crore for the full fiscal 2018-19.

For integrated GST, the government has refund Rs 38,988 crore till November compared with Rs 56,057 crore for the full last year. Similarly, input tax credit refunds stood at Rs 33,395 crore till November, compared with Rs 36,513 crore last year.

The Revenue Secretary Ajay Bhushan Prasad Pandey is now addressing the media.

Subramanian said that 66 percent of the budgeted capital expenditure has already been undertaken. He added that select CPSEs have undertaken capex of Rs 98,000 crore till Nov. 19.

Subramanian said that foreign investors have reposed their faith in the Indian economy as FDI inflows have hit a record $35 billion in the first half of 2019-20.

The Chief Economic Adviser said that the government has sanctioned support of Rs 4.47 lakh crore to NBFCs and HFCs to support retail lending. It has also approved the partial credit guarantee scheme, he added.

Subramanian said that the government has also cleared dues worth Rs 61,000 crore.

Government has focussed on clearing dues, enabling retail credit and supporting the small and medium enterprises through bill discounting, Chief Economic Adviser Krishnamurthy Subramanian has said.

This along with tax refunds and the corporate tax rate cut will help boost the economy, he said.

India’s Union Cabinet on Dec. 11 gave its nod to the National Highways Authority of India to set up an infrastructure investment trust and monetise national highway projects.

“The Union Cabinet, chaired by the Prime Minister Narendra Modi, has given its approval to the proposal of Ministry of Road Transport and Highways, authorising NHAI to set up InvIT as per InvIT guidelines issued by SEBI (Securities and Exchange Board of India),” the ministry said in a statement.

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It also approved infusing additional Rs 5,300-crore capital into India Infrastructure Finance Company Ltd. through recapitalisation bonds in the current financial year. Another Rs 10,000 crore will be infused in 2020-21. “This will be done through regular budgetary support and/or through issuance of recapitalisation bonds,” an official statement said.

India’s cabinet had on Dec. 11 approved a second amendment to the Insolvency and Bankrupcy Code — one of India’s largest reforms over the last few years which has been key in cleaning up the nation’s bad loan.

The amendment seeks to streamline the corporate insolvency resolution process and protect a successful resolution applicant from criminal proceedings against offences committed by previous managements or promoters of a corporate debtor.

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Slowing goods and services tax revenue collection has substantially increased the compensation the central government pays to states for revenue loss on account of the nation-wide implementation of the indirect tax.

In April-July 2019, the centre paid states Rs 45,745 crore in compensation. That’s a 143 percent jump over the Rs 18,829 crore paid in the same period last year, according to a report issued by the Parliamentary Standing Committee on Finance.

This has led to pending GST compensation payments to many states since August.

Finance Minister Nirmala Sitharaman on Thursday assured the centre will honour its commitment but did not say by when the dues will be cleared.

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On Wednesday, India approved changes to the partial credit guarantee scheme introduced in Budget 2019-20 to allow state-run banks to buy lower-rated assets from non-bank lenders.

Public sector banks will now be allowed to buy ‘BBB+’ rated assets of non-banking financial companies against the earlier rule that only ‘AA’ rated assets will get the benefit of the partial credit guarantee being offered by the government.

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The Indian economy slowed further in the July-September 2019 quarter, as consumption failed to revive and private investment remained stagnant. Government expenditure, however, picked up pace and helped hold up the economy.

Gross domestic product growth came in at 4.5 percent in the second quarter of 2019-20 compared to 5 percent in the first quarter, showed data released by the Central Statistic Office on Friday. In gross value added terms, the economy grew at 4.3 percent compared to 4.9 percent in the previous quarter.

The Reserve Bank of India, during its bi-monthly policy, lowered India’s GDP growth forecast for 2019-20 to 5 percent from 6.1 percent on account of a continued consumption slowdown in the country.

According to data released on Thursday, India's industrial output contracted for the second straight month, led by weakness across segments as the economy is yet to show signs of picking up.

At the same time, India’s retail inflation surged to the highest in over three years in November, led by a steep rise in prices of vegetables, such as onions, and pulses.