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NEW DELHI : Finance minister Nirmala Sitharaman on Monday emphasized that the government reposes trust in industry, saying this is critical to leveraging pandemic-induced opportunities that can help the Indian economy leap a generation ahead.

The remarks are seen as the government warming up to the industry after recent high-profile run-ins had made the relationship frosty.

Sitharaman told members of the Confederation of Indian Industry at a closed-door event in Chennai that the ongoing dialogue with industry has enabled the government to take a series of actions as the situation with the pandemic evolved, according to a statement by the industry lobby.

Last month at CII’s annual event, trade and consumer affairs minister Piyush Goyal criticized Indian companies, alleging their business practices went against the national interest, The Hindu reported on 13 August. However, that portion of the video of Goyal’s address has been removed from public platforms.

Late in August, Sitharaman summoned Infosys Ltd’s chief executive officer Salil Parekh to explain why software glitches in the new tax-filing website developed by Infosys had not been fixed two-and-a-half months after its launch.

Earlier this month, a magazine associated with the Rashtriya Swayamsevak Sangh, the parent organization of the ruling Bharatiya Janata Party, called Infosys “anti-national". Sitharaman criticized the article, telling CNN-News18, “That wasn’t right. I think they have also made a statement distancing themselves from whoever wrote it. I think that’s not called for and, rightly, people have withdrawn from it. It wasn’t right at all."

On Monday, the finance minister elaborated on the government’s strategy for handling the pandemic.

She said that, on the one hand, the focus is on ramping up vaccination as that was the big protection measure against the pandemic.

“On the other hand, the government is working on ramping up health infrastructure, including in tier II and tier III cities, by supporting the private sector," she added.

In other remarks, the minister declared liquidity in the banking system is no longer a matter of “major concern".

“Finance minister reiterated that the announced disinvestment plan was on track. She further shared that the development finance institution announced in the budget would be operational soon. She also expressed satisfaction that liquidity is no longer a major concern and that the Bank-NBFC-MFI channel has been de-clogged, and from 15 October, there would be a special drive to reach out credit to those who need it," the CII said.

Banks hit by mounting bad debt have been reluctant to lend, thus contributing to factors that have held back economic growth over the past several years, despite low interest rates.

However, the finance ministry has nudged public sector banks to boost credit flow to retail borrowers and small businesses during the festive season through a second round of the so-called loan melas, seeking to lift weak private consumption and economic growth.

Non-food credit growth increased to 6.61% in the fortnight ending 13 August, compared with 6.18% in the previous fortnight, the latest data released by RBI showed.

CII president T.V. Narendran applauded the government’s initiatives towards preparedness for the third wave and interventions to catalyze private investments, such as production linked incentive schemes and the National Monetisation Pipeline.

“He urged the government to continue front-loading its committed capital expenditure to support the demand recovery and for the virtuous cycle of private investments to set in," the CII said.

 

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