FM Nirmala Sitharaman says macroeconomic fundamentals are sound

The finance ministry’s assessment of the impact of the second wave on the economy will take a bit longer considering the timings and uncertainties, she said


Nirmala Sitharaman | Indian Economy | Vaccination

India’s macroeconomic fundamentals remain sound, which is reflected in the robust investment flows into the country, Finance Minister Nirmala Sitharaman told Business Standard in an exclusive interview.

“Just before the second wave of the pandemic hit, the high frequency indicators were robust, be it domestic factory orders, goods, services, electricity consumption, foreign direct investment flows, foreign exchange reserves etc,” she said.

Responding to a question on the rapid rise in stock market indices and the Reserve Bank of India’s caution on a bubble, Sitharaman said, she doesn’t want to jump to such a conclusion. “It’s a different story that if it’s a bubble we have to be prepared. But, I don’t think it’s a bubble,” she said.

Even though the Union Budget 2021-22 was presented two months before the second Covid-19 wave battered the economy, Sitharaman said the Budget was ‘tailor-made’ for the pandemic and she would focus on execution and implementation of the Budget proposals before arriving at a conclusion on what further relief measures were required.

ALSO READ: Do not politicise GST Council: Finance Minister Nirmala Sitharaman

The finance ministry’s assessment of the impact of the second wave on the economy will take a bit longer considering the timings and uncertainties, she said, adding she will need more time to give a direct answer to any question on any immediate relief measures.

However, she did not rule out relief for stressed sectors. “My interaction with industry and with states are happening now. Why would I want to say anything more on further relief measures without getting full knowledge of the impact?” Sitharaman said.

ALSO READ: RBI policy offers continuity for stock markets, support to consumption

She emphasised that the government remained committed to the Rs 1.75 trillion disinvestment target for the fiscal, despite disruption due to the second wave. “I will do everything that I’ve said in the Budget this year, which includes everything that was approved by the cabinet already and announced in Budget 2021-22, including Air India. Privatisation is on course,” the finance minister said.

Sitharaman did not rule out an additional allocation for vaccines beyond the Rs 35,000 crore this year. “…if need be, I’m willing to give more than what has been allocated in the Budget as we negotiate with more suppliers. But let the Rs 35,000 crore be spent first,” she said.

ALSO READ: RBI Policy: Are central bank’s inflation & GDP targets too ‘optimistic’?

The government may even review the vaccination distribution policy as more states express their inability to carry out the drive amid shortages and high cost of procurement compared to what the Centre can get.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor