Budget to unveil more changes to push growth, says Nirmala Sitharaman

Notwithstanding the Covid-19 pandemic, the government has initiated a series of reforms to promote its Aatmnirbhar Bharat Abhiyan (Self-Reliant India Initiative), and the momentum of the process will continue, finance minister Nirmala Sitharaman said on Monday, indicating that the coming budget will unveil more structural changes to boost the economy.

Outlining the government’s policy direction from the perspective of multi-national companies (MNCs), she said: “If you were to look at the Indian economy, and where the emphasis would be in the coming budget..., I would start with the fact that the Prime Minister himself has been engaging with the global investor community and talking to them {about} what exactly he looks at for India, how does he view India in this changing environment.”

The finance minister was addressing the National MNC Conference organised virtually by the Confederation of Indian Industry (CII).

Referring to the recent Virtual Global Investor Roundtable (VGIR-20) where Prime Minister Narendra Modi heard delegates speak about the policy expectations of investors, she said the government had initiated several reforms that are attractive for MNCs, such as a significant corporate tax cut in September 2019.

The Prime Minister on November 5 invited 20 major global investors to become part of a “New India” that aims to become self-reliant, calling it a “well-planned economic strategy” to make the country a global manufacturing powerhouse.

“Today, India is changing and for the better. From fiscal irresponsibility to fiscal prudence, from high inflation to low inflation, from reckless lending creating non-performing assets [NPAs] to merit-based lending, from infrastructure deficit to infrastructure surplus, from mismanaged urban growth to holistic and balanced growth and from physical to digital infrastructure,” the Prime Minister said.

Addressing Indian and MNC executives, Sitharaman said the government’s vision was to forge greater engagement with global economies and become a valuable part of the international supply chain. She assured them that the momentum of economic reforms would continue to make India a hot spot of global investment.

The reforms announced by the government under the Aatmanirbhar Bharat package have opened up many sectors including niche ones such as nuclear energy and space technology to foreign investors, she said.

She said Aatmanirbhar Bharat did not mean insulating India from the rest of the world. It aims to make India an integral part of the global value chain by improving its domestic competitiveness, she added.

“Even at the time of the Covid pandemic, the Prime Minister has not lost an opportunity to take deep reforms, to undertake those kinds of reforms which have not seen the light of the day over the decades,” Sitharaman said.

“The momentum for reform shall continue. Several more active reform-related steps are being taken up,” she said, adding that the Narendra Modi government has turned the Covid-19 crisis into an opportunity to make major reforms that had been pending for decades.

The measures include professionalisation of the financial sector and a thrust on disinvestments, she said. “All enterprises, MNCs and India Inc., big, medium and small enterprises, are facing a reset exercise in doing business. We will have to make sure that policies are right to make India an attractive investment destination,” she added.

Soumitra Bhattacharya, managing director of Bosch Ltd, said recent landmark reforms in corporate taxation, foreign direct investment (FDI) policies, simplification of agricultural laws, seminal changes in labour laws and the introduction of a production-linked incentive scheme are some of the major reforms introduced by the government, which will add up to making an Atmanirbhar Bharat.

Bhattacharya, who is also chairman of the CII National Committee on MNCs, acknowledged the rapid pace of reforms undertaken by the Modi government. “The reforms must continue given the tectonic shifts in global supply chains in a post-Covid world, which are attracting many foreign firms to shift their base to India. This opportunity must be seized fully,” he said.

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