Finance Minister Nirmala Sitharaman in a written reply to Parliament on Monday said: “This revision in growth may not cause any stress in the Non-Banking Financial Companies (NBFCs) sector as they are well-capitalised.”
She replied to some of the pertinent questions asked by parliamentarians Abdul Khaleque and Saugata Ray on sectors that have taken the hit of the sliding growth rate and whether the government proposes to share its plan to arrest the slide of growth rate.
Sitharaman while replying to all these questions said, “India’s growth trajectory over the period 2014-15 to 2018-19 is characterised by macroeconomic stability with real GDP growth averaging 7.4 per cent. As per National Statistical Office’s First Advance Estimates of National Income, 2019-20, India’s real GDP is estimated to grow at 5.0 per cent in 2019-20. World Economic Outlook Update (January 2020) published by the International Monetary Fund (IMF) has revised India’s GDP growth rate to 4.8 per cent in 2019. This revision in growth may not cause any stress in the NBFCs.”
Talking about the plan and the structural reforms taken by the government to arrest the slide of growth rate, Sitharaman said that the government has implemented several major structural reforms in recent years to bolster investment and growth. This includes Insolvency and Bankruptcy Code (IBC) to strengthen the financial system, Goods and Services Tax (GST) to simplify the indirect taxation regime, Make-in-India programme to boost domestic manufacturing capacity, liberalization of Foreign Direct Investment (FDI) and Jan Dhan-Aadhaar-Mobile (JAM) Trinity towards greater transparency, efficiency and financial inclusion.”
She also threw light on how cutting the corporate tax rate to 15 per cent for new domestic manufacturing companies, which is among the lowest in the world made India an attractive destination for foreign investments. She also mentioned the government’s recent announcement of Rs 103 lakh crore National Infrastructure Pipeline, which would significantly boost infrastructure and spur growth impulses in the economy.
Picking out some reforms from Union Budget 2020-21, she said that the government has also announced a number of measures to support broad-based and inclusive economic development. These include rationalization of personal income tax rates to support domestic demand, a 16-point action plan for the holistic development of the agriculture sector and critical measures to boost infrastructure and rural spending.
FM maintained the improvement in growth and the measures announced in the Union Budget 2020-21 are expected to further strengthen the non-bank financial sector and promote rural income growth.