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'I am looking at the economy. I'm intervening where I need to intervene. I shall continue to address problems of industry,' said Nirmala Sitharaman at a press conference in New Delhi on Friday (Photo: Pradeep Gaur/Mint)
'I am looking at the economy. I'm intervening where I need to intervene. I shall continue to address problems of industry,' said Nirmala Sitharaman at a press conference in New Delhi on Friday (Photo: Pradeep Gaur/Mint)

Fresh steps to revive the economy on 1 February

  • Finance minister Sitharaman will present the Union budget on a Saturday
  • The finance minister said that budget consultations with the industry will start on Monday

New Delhi: Finance minister Nirmala Sitharaman will present the Union budget for fiscal year 2020-21 on 1 February with possible big-ticket announcements based on requirements voiced by industry as she looks to pull India out of its economic slowdown.

Sitharaman told reporters here that budget consultation with the industry will start on Monday. Former finance minister Arun Jaitley had presented the Union budget on a Saturday in 2015, when the convention was to have the budget tabled on the last day of February. The date was advanced to 1 February in 2017-18. Two officials, who spoke on condition of anonymity, confirmed that the budget presentation in Parliament will take place on 1 February.

Sitharaman said she has been engaging with industry and analysing the state of the economy ahead of announcing steps to boost growth. Further big-ticket announcements could be expected in the February budget based on demands made by different industries during a series of consultations.

“Till now, across the board, whoever has asked for our intervention, we have responded to them. I will be keen to see if these steps are meeting the expectations of the sectors concerned. If not, I may want to see if I need to do more," Sitharaman said at a press briefing. The government announced corporate taxes cuts besides offering incentives to exporters, automobile companies and builders in a series of announcements starting in August.

“It is a question now of the budget getting too close…We are starting the exercise on Monday," Sitharaman said referring to pre-budget consultations. “I am looking at the economy. I am intervening where I need to intervene. I shall continue to address the problems of the industry, as and when they arise."

Sitharaman’s assurance comes amid a deepening economic slowdown. India’s economic growth decelerated to 4.5% in the September quarter, its slowest pace since March 2013.

Official data released on Thursday showed that the industrial sector remained weak with output shrinking by 3.8% in October. Although the contraction was less intense than in the previous month, the worrying factor is that production of consumer goods such as cars and air-conditioners contracted sharply by 18% in October, the fifth consecutive month of deceleration.

The minister avoided questionson the proposal to increase goods and services tax (GST) rates and introducing a cess on items taxed in the highest slab of 28%.

In response to a query from Mint, Sitharaman said: “The buzz is everywhere else other than in my office. I do not know where this is coming from. I have not been to GST Council on it. We have not had a conversation on whether to request for an increase or to review. We have not had any conversation. We as a team has not spoken about what to go to the Council with. We have not taken a call."

At the same time, the minister denied any plan for a rate increase was off the table.

Department of economic affairs secretary Atanu Chakraborty, who was present at the briefing, said the government had consulted around 30 departments and the information will be passed on to investors as the Centre approaches the final stages of implementing 100-trillion investment for infrastructure projects.

According to Chakraborty, the information will form the basis for projects, the sequence of implementation, their financing and the sectoral reforms required. “Most of the data largely is in place. That is getting verified. This is in very advanced stage of finalization."

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