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Policy intervention in economy to continue when needed: FM

By IANS | Published: December 13, 2019 8:02 PM

Finance Minister Nirmala Sitharaman on Friday dismissed questions on a time period on the uptick probability of the economy amidst rising inflation and contracted factory output and second quarter GDP growth falling to 4.5% saying she would continue to intervene in the economy when and wherever needed.

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"I am not engaging in any prediction based questions, neither will I answer speculations. I am looking at the economy and I will continue to address the problem of the industry and any crisis. I am here to intervene in the economy when needed," she said in response to a barrage of questions on the probable time period of a higher growth return of the Indian economy.

"Till now, sectors that have demanded some kind of intervention, we have responded to them. I'll be keen to see whether these steps are meeting the expectations of the sectors. If not, I may want to see if I need to do more. As of now, there is no other sector that has approached me as yet.

"I will not engage in speculations over retail inflation and interest rates," the FM said after being asked if there is a possibility of no more interest rate cuts by RBI in view of the high inflation."

Ironically, she started the media interaction saying, "We are here to put various legislative measures that we have taken and to come back to say where we are on the various announcements that were made before the Parliament session commenced for winter session and what progress has been made prior to the budget session."

On the possibility of a review of GST rates at the upcoming Council meeting, she said she and her team (the Finance Ministry) has not said anything on that.

"There has been no discussion of changing the GST rate in the Finance Ministry so far", she said. But she also dismissed the possibility that it is completely off the table.

Her response comes amidst reports that the Centre will propose hiking the 5% rate slab. The Centre may propose hiking the 5% GST rate to between 6% and 8%. The GST officers panel will suggest rate restructuring in the next GST meet on December 18.

On the review of compensation cess to states under GST, she said no one is denying that the states have a right to the compensation amount.

With states not being paid compensation for loss of revenue from implementation of GST since August, Sitharaman had on Thursday assured that the Centre will honour its commitment but did not say by when the dues will be cleared.

States that surrendered powers to collect taxes on goods and services after local levies got subsumed into the Goods and Services Tax (GST) from July 1, 2017 were through legislation guaranteed to be paid for any loss of revenue in the first five years of GST implementation.

This monthly compensation was to be paid within two months but states haven't received any such amount since August 2019.

( With inputs from IANS )

Tags: GSTThe Finance MinistryFinance MinistrycentreSitharaman
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