Addressing the Indian Chamber of Commerce (ICC) Annual General Assembly, Sitharaman said that while green sprouts and signs of economic recovery were visible in early 2020, he was shocked by the onset of the pandemic.
The government has taken steps to intervene by consulting several chambers of commerce and Prime Minister Narendra Modi has also received feedback from the industry, he said.
For example, the government announced Garib Kalyan Yojana, free cooking gas and direct benefit transfer schemes, Sitharaman said.
Three different sets of announcements regarding “Atmanirbhar Bharat” were made and, together with RBI, some schemes tailored to various sectors based on demand were unveiled, he said.
“We didn’t limit the opportunities to any particular sector. This was necessary to keep the sector floating,” Sitharaman said.
“But no government intervention will be adequate,” he added.
Sitharaman said that while the 1991 reforms were a big step, it did have a balance of payments crisis.
“If the government of that time had done more, the economy would have been in better shape now,” he said.
The government has introduced agricultural reforms, introduced new labor codes for flexibility, and made it expensive to import goods that can be produced in the country, the finance minister said.
On the next budget, he said that public spending, including on capital and infrastructure, will be maintained.
Sitharaman said several sovereign and pension funds are willing to come to India with long-term commitments, which is leading to higher domestic FDI flow than comparable economies.
The divestment agenda, which has been cleared by the government, will move forward and the banks will be run by professionals with risk officials brought in from outside and not appointed from within, he said.
“DIPAM will be more active. What we see the most is the dynamism,” the minister said.
Exuding hope, Sitharaman said: “We are seeing clear signs of recovery. But this must support. We need input from the industry at this extraordinary time when budgeting.”