The global slowdown and a possible recession in the West could be a challenge for India’s trade, said finance minister Nirmala Sitharaman on Wednesday. She urged exporters to actively engage with the Centre to insulate themselves from any negative impacts.
The FM was speaking at multiple post-Budget interactions with various industry bodies. She added that the long-pending reforms of including petroleum products under the goods and services tax (GST) could take place once there is consensus among states.
“Indian exporters have to be far more receptive of what is happening there (globally) or even foresee how it will pan out for them. They must keep constantly engaging with the government. Otherwise, at a time when our exporters are really readying themselves to be on their toes, such challenges can demotivate them,” she said.
The FM was speaking at an event of the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Sitharaman also said that a number of micro, small, and medium enterprises (MSMEs) still depend on critical components that have to be sourced from other nations.
“There are several MSMEs and large manufacturers who still need those critical components to come from somewhere else. We have kept ourselves completely aware of it. Our approach has been to go item-wise on Customs duty. That’s why we were able to bring it (Customs duty) down across 18- 20 categories. We will keep the momentum going but will keep the interest of Indian industry in mind,” she said.
The finance minister added that the government is also keeping an eye on the surge in imports. It is working closely on defining what level and in which sector imports can be allowed. She said that even though the surge in imports may be for three months, it can still hurt for the rest of the year.
Speaking at another session of the PHD Chamber of Commerce and Industry (PHDCCI), she said that petroleum products can be included in GST, if states agree.
“The provision is already available for petroleum products to be brought under the GST. My predecessor (Arun Jaitley) had already kept the window open. Once the states agree, we will have the petroleum products also covered under the GST,” the finance minister said.
Five petroleum products — petroleum crude, motor spirit (petrol), high-speed diesel, natural gas and aviation turbine fuel have temporarily been kept out of GST.
Sitharaman said that the government’s focus is to ensure that the public expenditure continues to grow as it will have a desired multiplier effect on all the sectors.
“For the last 3-4 years, there has been a consistent emphasis on public capital expenditure. This year’s Budget has seen a 30 per cent increase in capital expenditure. This is the first time in many years that the capital expenditure has reached double digits, making it the clear focus of this Budget,” finance minister said.
She also highlighted that inclusion is an important pillar of the Budget. It also made a provision for the free-food programme and self help groups (SHGs) can ensure that the money is directed to the right places, generating multiplier effects.
“There are more than 8.1 million women’s SHGs in the country. To ensure that these groups have greater access to resources, professional assistance, and market linkages, we are adding branding and market-finding activities to their portfolio. With these initiatives, we hope to enable true women’s empowerment, allowing them to scale up their activities. They can run a professional, profitable, and government-supported women’s group,” she said.