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This article was first published 3 years ago  » Business » 'Economy is constantly on PM's mind'

'Economy is constantly on PM's mind'

By Indivjal Dhasmana and Shyamal Majumdar
October 12, 2020 08:42 IST
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'We are continuously engaging with him to see what interventions to make and when.'

IMAGE: Prime Minister Narendra Damodardas Modi during the Bharatiya Janata Party's central election committee meeting at the BJP headquarters in New Delhi, October 4, 2020. Photograph: Rahul Singh/ ANI Photo

"I would like to convey the message to your readers that the prime minister himself is directly seized of the situation on the ground. He periodically reviews the situation on the ground and how it is moving forward, taking inputs from economists, business leaders, chambers of commerce," Finance Minister Nirmala Sitharaman tells Indivjal Dhasmana and Shyamal Majumdar in the concluding segment of a three-part interview.

The Comptroller and Auditor General of India has criticised the Centre for using the compensation cess collections for other purposes?

Not at all. What had happened was the collected money goes to the consolidated fund of India and then comes to the compensation fund and then gets dispersed to states.

Once it went there, it wasn't transferred into the fund. As a result, we had a couple of months of difficulty.

And then, after I came, one of the first things I did was to get that out of the consolidated fund and put it into the fund and then be able to distribute it to states.

That is why I could clear last year's compensation when the it was just about Rs 95,000 crore and we had given out Rs 1.6 trillion to the states.

When you announced the Atmanirbhar Bharat package you said the government will generally not resort to an export ban on agricultural produce. But you imposed it on onions a few weeks back. It could not bring down the prices.
Do you think that export ban on farm produce is a futile policy?

Yes, and no. Yes, because it has proved ineffective.

But if you don't do it, farmers feel we don't know what is going on. Though consumers are probably paying more, we don't seem to get the reward.

Consumers feel if we don't do it, prices are going to shoot up even further. So, these are the steps taken to address immediately several factors.

At the CII meeting, you said there is merit to review the GST rates on two-wheelers. Will you be taking that proposal to the GST Council?

One of the participants in that meeting said two-wheelers cannot be considered demerit goods to warrant 28 per cent tax. I agreed with that. But, we have to leave it to the wisdom of the Council.

What about the similar demand on cars?

It is also left to the wisdom of the Council.

In the previous Council meetings, even when we wanted to correct the inverted duty structure issue, picked up three-four items, they (states) in principle agreed with us, but did not want to correct it at this point of time because in some items it might lead to increase in rates.

CAG also observed the income-tax department is making high-pitched demands after searches that are not sustained at the appeal levels. Is there any mechanism being worked to address this?

I suppose the faceless system is going to address this. The assessee are also providing a pre-filled form. The assesse even at that stage can question it.

What would be your broad message for those hit hard by the coronavirus-induced lockdown and our readers?

I would like to convey the message to your readers that the prime minister himself is directly seized of the situation on the ground. He periodically reviews the situation on the ground and how it is moving forward, taking inputs from economists, business leaders, chambers of commerce.

You can rest assured that the economy and economy-related issues are constantly on the prime minister's mind and we as a group are continuously engaging with him to see what interventions to make and when.

The motive is very clear -- to make sure that the revival is fair and include everybody. We have always designed and carried out interventions which are equally available to similarly placed people. That will continue to be the guiding principle for us.

What about sectors like restaurants, which are the most affected? They think they are suddenly left with no budget at all. Can we expect a sector-specific package?

I don't know. As I said, we are still working in different ways. All inputs have been taken on board. Let us see how it works out.

How do you assess the performance of banks after mergers?

I am asked questions about the effectiveness of the Insolvency and Bankruptcy Code. I am asked about the effectiveness of merging banks.

IBC has not completed three years. So has the merger. It has not completed even one full year. And that one year after the merger has been trying for all of us.

The very same banks which have been merged are out there in the field, exposing their staff to Covid, but reaching out to the customers through their bank correspondents and branches to implement all the schemes that we have announced in the Atmanirbhar Bharat package.

Although I broached the matter once, I did not have the heart to ask them about their merger-related matters.

The Opposition has alleged that the Income Tax (amendment) Bill passed by Parliament gives income tax relief to the PM CARES Fund, but not to CM relief funds. Do you think there is an anomaly in this regard?

In 2013, when the Companies Act was amended, there was a provision that not only the PM National Relief Fund but other funds will also benefit from relief given to the corporate social responsibility.

In February 2014, with just a couple of months to go for Lok Sabha elections, an amendment was brought in the Companies Act which denied the CM's Relief fund CSR relief.

Who was the prime minister in 2013? Certainly not Narendra Modi.

Is the National Democratic Alliance falling apart? Akali Dal President Sukhbir Badal alleged that no meeting of the group has taken place for a long time. The party has left the NDA, the Shiv Sena had quit it earlier.

Others are there (in the NDA). I don't think there is any weakening of the NDA. There can always be members who feel that there are reasons to leave the NDA because of a particular cause. I will not comment on that.

The matter of fact is they should remember that even after getting 303 seats in the last Lok Sabha elections, the prime minister did not say that it is a BJP government. He never excluded anyone.

It was an NDA government in 2014, it is an NDA government in 2019.

The prime minister has never undermined or ignored any ally.

How do you see the chances of your alliance in the assembly elections in Bihar, given the plight of migrants?

I think Bihar is very good for the NDA. We will win hands down.

The prime minister has always paid attention to the eastern parts of India, be it Bihar, be it Odisha, Jharkhand, the north east and ensured that they get good attention from the Centre.

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Indivjal Dhasmana and Shyamal Majumdar n New Delhi
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