Mumbai: “The Union Budget 2022-23 is a budget which has been made for a time when the economy is coming out of the pandemic and recovery is the most important thing all of us have to focus on. We have hence tried balancing the focus on growth and sustained recovery; continuing with the story of investing in public infrastructure building. The budget has chosen spending on infrastructure as the more favourable route to ensure greater multiplier effect, which will also result in asset creation which can last for several years.” Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman said this during an interaction with stakeholders belonging to industry, large taxpayers and professionals, as part of her two-day post-Budget outreach in Mumbai today.
Secretary, Finance & Dept of Expenditure, T.V. Somanathan; Secretary, Economic Affairs, Ajay Seth; Secretary, Revenue; Secretary, DIPAM, Tuhun Kanta Pandey; Secretary, Financial services, Sanjay Malhotra; Chief Economic Adviser, V Anantha Nageswaran, Chairperson, CBIC, Vivek Johri and Chairperson, CBDT, Jagannath Bidyadhar Mahapatra were also present for the interaction.
The Finance Minister said that given the importance of a sustained recovery, the Budget lays priority on revival of the economy .”It also has messages for sustainability, predictable tax regimen and we continue with the good things we took up last year – such as transparency in accounting.”
The Union Minister said that the Budget also lays a blueprint for the next 25 years of India, up to India @ 100. “We want an India which today’s youth can be happy and proud to be living in. We are not only talking about today’s strengths and challenges, but also a future India with technological prowess and technology facilitating and strengthening policy-making.”
Smt. Sitharaman said that in coping with the pandemic, the nation has been able to leverage technology effectively, in helping benefits reach everyone, due to the diffusion of technology across the country. This focus on technology and digital is something we are building on, the Minister said. “We are building on digital not only for payment, but also for filling the gaps in the education sector the pandemic has caused. We are using technology in agriculture as well, for helping farmers.”
The Finance Minister expressed confidence in the youth of the country and their contribution to the economy through innovations via startups. “ We want to build on the innovation capacity of our youth; we want to cash in and build on the innovation they bring especially in frontier technologies.” She also said that the government will continue to support Start-ups.
Several issues on the economy and various sector-specific issues came up for discussion during the interaction with industry, including on strengthening the Production Linked Incentive Schemes for encouraging investment and domestic manufacturing; digital advancement and skill development across value chains, especially among women and women entrepreneurs; credit extension and increasing user friendliness of banks; introductory new capital classes and promoting blockchain.
There was a reasonably detailed discussion on steps which can be taken to increase employee diversity. Assuring the industry that the government can be trusted to do what it can, the Finance Minister sought industry representatives for their views on what steps need to be taken and what they can take in order to increase employee diversity and women’s participation in the workforce.
The Minister, while answering a question regarding correction in tax inversion, expressed that the voice of the industry in this case is mixed – both for and against. She informed that since a section of the industry is still not ready for it, a decision was taken, in consultation with the GST Council, to not correct the inversion. She also informed that correction is required for PLI, for investment to come in.
Banks will have to be a lot more customer-friendly: FM
The Finance Minister underlined that banks will have to be a lot more customer-friendly, not in terms of taking adverse risks, but in how they engage with and serve customers. Responding to a query on hassle-free loans to Start-ups, the Finance Minister noted that the Prime Minister has told citizens that ‘I am the security behind you, please take loans, you don’t need to give security’. “This is the thinking behind MUDRA and SVANIDHI schemes; and the performance in servicing the loan has been very good”, the Minster said.
The Department of Investment and Public Asset Management (DIPAM) Secretary, Tuhin Kanta Pandey said that the Self Help Group movement has made tremendous progress in group entrepreneurship, and millions of women have come out to manage businesses. “For individual entrepreneurs, we can learn from group activity and see how it can be translated into other areas of entrepreneurship” he added
The Revenue Secretary Tarun Bajaj noted that balance sheets of both banks and the corporate sector have started looking up. “We want our growth rate to be high enough in the coming years so that we can help the economy. SBI needs to work out some system to push credit into the economy, we request SBI to take leadership and address concerns of MSMEs and large businesses too ” he said
On duties and taxes
Responding to a question on import duty on a certain type of long-staple cotton, the Finance Minister said that while we need to use raw materials available in India rather than seek to import, there are voices which say that even the little restriction the government brought in terms of duty on import of a certain type of long-staple cotton not grown in India should be removed. The Minister expressed the perception challenge involved in public policy formulation and implementation. “There is a perception battle in every decision, and people ask for a retraction and comment on decisions much before studying the decision in full. What we need is a discerning debate, not passionate reactions.”
The Minister also emphasized the significance of decisions taken by the GST Council which has participants from both states as well as the centre. “GST Council is a fantastic body comprising Centre (as 1/3rd participant) and all states; so when we – knowingly or unknowingly – try to tarnish the GST, we are undermining the institution which has been created with all states on board,” she said.
“Government has nothing against blockchain technology. RBI digital currency itself will be based on a version of blockchain technology,” Secretary, Finance, T.V. Somanathan clarified that the government’s policy towards blockchain has nothing to do with its policy towards crypto assets or virtual digital assets. He informed that Coffee Board of India has launched a blockchain system for identifying specific varieties of coffee from specific fields so that they fetch higher price due to information on availability of its origin.
Ease of Doing Business
The Economic Affairs Secretary exhorted the industry to examine how measures to improve Ease of Doing Business and Ease of Living can be employed to improve business productivity. “A very significant part of Budget 2022 is on Ease of Doing Business 2.0 and Ease of Living and reducing cost of doing business; don’t treat it as compliance; look at it sector-by-sector, how a combined effort can improve productivity, relevant parts of Government will reach out to their stakeholders on how to increase investment and productivity.”
Today’s Post-Budget interactive meeting was attended by top bankers, heads of corporates, representatives of industry and trade associations, champions of the Start-up sector and various other experts and professionals. Finance Minister is on a two-day visit to Mumbai on along with his entire team to engage and interact with all stakeholders, industry representatives, bankers, regulators and financial market functionaries.
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