Invoking Hanuman, FM to Industry: Step up investment, do not doubt capability

At a time when private investment remains subdued, Union Finance Minister Nirmala Sitharaman on Tuesday drew a parallel with the mythological character ‘Hanuman’ and urged the industry to increase its investment. Referring to reports of fees to micro, medium and small enterprises (MSMEs) to the tune of Rs 10 lakh crore, Sitharaman said that not all the payments were due from the government, but the companies also had a considerable amount outstanding for These companies.

“Is it like Hanuman? You don’t believe in your own ability, in your own strength and there has to be someone standing next to you and saying that you are Hanuman, right? Who is that person going to tell Hanuman? It certainly can’t be the government,” Sitharaman said addressing the Mindmine Summit.

The Finance Minister further said that overseas countries and industries think India is the place to be now and this is reflected in FDI and FPI inflows and confidence among stock market investors. “I hear that a lot more companies that are moving out of China want to come (to India) because they find the policies much more attractive, not just PLI, but overall the ecosystem makes it much easier for those companies to move out. locate. themselves in India.”

“I want to hear from the Indian industry what they are hesitant about… Since 2019, when I took over the Ministry of Finance, I have heard that the industry does not think their (environment) is conducive. Very well, the (corporate) tax rate was lowered. I continue to defend the industry even when people provocatively ask me what I would like to say to the private sector. We will do everything possible for the industry to come and invest here. Give PLI, we have given PLI. I want to know about India Inc: what is stopping you?” she said.

India’s economy posted a 13.5 percent growth rate in the first quarter from April to June, helped by a low base. The RBI has forecast India’s GDP to grow 7.2 percent in FY23. According to the Center for Monitoring the Indian Economy (CMIE), capital spending on new projects during April-June was Rs 4.28 lakh crore, almost half of Rs 8.18 lakh crore in the March quarter. During the October-December and July-September quarters of 2021-22, capex on new projects was Rs 4.01 lakh crore and Rs 3.39 lakh crore, respectively. In the quarter from April to June 2021, when India bore the brunt of the Covid19 Delta wave, the capex for new projects stood at Rs 1.55 lakh crore.

In a July note, CMIE also noted that during the quarter ended June 30, 2022, proposals worth Rs 3.57 lakh crore were made to establish new capabilities in the industrial, infrastructure and service sectors. This was much lower than the bids worth Rs 5.91 lakh crore that were made in the previous quarter ending March 31, 2022.

On providing support to MSMEs, he said: “…I know that I am stepping on a dangerous area full of landmines, it is not only what the government can give… all of you can help equally. We wanted the payment to reach MSMEs in due time… I spent a lot of time reviewing it (the data). I was surprised to find that a sizeable outstanding payment was also from large industries,” he said.

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Sitharaman said that while it could boost companies and public sector departments (PSUs) and can apply for states, it can only appeal to industry. “For all the tears we shed for MSMEs, can we limit the time that MSMEs collect fees?” he said.

According to CMIE data, higher top-line growth played a key role in the earnings growth of listed Indian non-banks in the June 2022 quarter, with better utilization of existing assets helping. to drive much of this growth. For three consecutive years from 2019-20, sales growth has been driven by growth in better asset utilization and the contribution from asset growth has been negative, according to CMIE.

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