Indicators reflect India’s revival, says FM | Economic Times

A strong uptick in economic indicators as well as the services sector reflects India’s revival, said finance minister Nirmala Sitharaman at The Economic Times Awards for Corporate Excellence, noting that the government was closely watching developments in the US to avoid a repeat of the 2013 taper tantrum.Steadily rising high-frequency indicators such as the purchasing managers’ index (PMI) in manufacturing and services, e-way bills, rail freight, and goods and services tax (GST) collections, indicated increasing consumption and clear evidence of positivity and economic revival. She quoted the Reserve Bank of India’s review to showcase the uptrend in the services sector.“India’s growth is definitely on the higher growth benchmark and also… it is sustained,” she said.While the resurgence in Covid cases is worrying, the government is confident of addressing concerns and the inoculation campaign will be intensified. “There is also this planning for ramping up the vaccine being given, both from the supply and also the execution point of view,” Sitharaman said. “With further such focused efforts, I think we will be able to address the concerns about spike in cases. However, it definitely requires a lot of watching out for.”81624293Sitharaman Allays Fears of Job Cuts, Closure of PSEsIndia has enough vaccines, she said.“Thanks to the way this country over the decades placed emphasis on development in vaccines, the pharma sector and so on, today we are in a very comfortable position as regards vaccine supply, not one, not two probably even more,” Sitharaman said. “Some of them getting manufactured, companies (making) arrangements for some formulations which have been done outside and some which are formulated in India, manufactured in India.”The finance minister said the economic resurgence was reflected in agencies improving their ratings for India. Earlier this month, the OECD global economic outlook revised India’s GDP growth to 12.6% for FY22, the fastest among global markets, from 7.9% projected in December. Sitharaman added that the government had held several discussions with the RBI and was thus in greater sync with it.“I don’t think India faces the risk of repeating the taper tantrum now,” she said. “We are carefully monitoring the situation, and taking every such step, small, immediate, to make sure that the path is fairly clear for the stimulus to work and the revival to happen.”Earlier this week, global rating agency S&P cautioned that countries such as India and the Philippines were “the most vulnerable at the current juncture”, even as Asian economies were better prepared. It was referring to a possible repeat of the 2013 taper tantrum, when India had to raise interest rates to prevent capital flight after US bond yields soared following talk of unwinding of the Federal Reserve’s quantitative easing program.Bond yields in the US are rising again, leading to fears that the Biden administration’s $1.9 trillion stimulus package might lead to inflation, and hence tapering.PrivatisationSitharaman allayed fears of job cuts and the closure of public sector enterprises (PSEs), saying that the government’s move to privatise state-owned companies was aimed at keeping them afloat while ensuring efficient use of, and accountability for, taxpayers’ money.“I will ensure that the rights of the workers, the perquisites of the workers, and all the commitments which have been made by the government for the workers — there are various levels and categories —are ensured,” she said, when asked about resistance to private ownership of PSEs.The finance minister said she should be able to convince people and take forward the agenda of privatisation if the principles of continuity, greater efficiency, more capital and workers’ concerns were addressed by the government.