At a time when private investments continue to be subdued, Union Finance Minister Nirmala Sitharaman Tuesday drew parallel with the mythological character ‘Hanuman’ and urged the industry to step up its investments. Referring to reports of dues to micro, medium and small enterprises (MSMEs) to the tune of Rs 10 lakh crore, Sitharaman said not all the payments were due from the government’s side but corporates also had a considerable amount pending to these enterprises.
“Is it like Hanuman? You don’t believe in your own capacity, in your own strength and there’s got to be someone standing next to you and say you are Hanuman, do it? Who is that person going to tell Hanuman? It can’t certainly be the government,” Sitharaman said addressing the Mindmine Summit.
The Finance Minister further said that countries and industries abroad think India is the place to be in now and this is being reflected in FDI and FPI inflows and confidence among stock market investors. “I am hearing a lot more companies who are moving out of China wanting to come (to India) because they find the policies a lot more attractive, not just the PLI but overall the ecosystem is far more facilitative of such companies coming out to locate themselves in India.”
Watch Live: Smt @nsitharaman in a conversation with Shri Sunil Kant Munjal, Chairman of Hero Enterprise, on the topic ‘Post Pandemic: Repurposing India!’ at the opening session of 15th edition of #mindminesummit2022. @Mindmine_Summit https://t.co/xKKdC3iMuE
— NSitharamanOffice (@nsitharamanoffc) September 13, 2022
“I want to know from the Indian industry what is it that they are hesitant about… Since 2019, when I took charge of the finance ministry, I have been hearing industry doesn’t think its (environment) is conducive. Alright, the (corporate) tax rate was brought down. I keep defending the industry even when people provocatively ask me what I would like to tell the private sector. We will do everything to get industry coming and investing here. Give PLI, we have given PLI. I want to hear from India Inc: what’s stopping you?” she said.
India’s economy clocked a growth rate of 13.5 per cent in the first quarter of April-June, helped by a low base. The RBI has forecast that India’s GDP will grow by 7.2 percent in FY23. As per the Centre for Monitoring Indian Economy (CMIE), capital expenditure on new projects during April-June was Rs 4.28 lakh crore, nearly half of Rs 8.18 lakh crore in the March-quarter. During October-December and July-September quarters of 2021-22, the capex on new projects was Rs 4.01 lakh crore and Rs 3.39 lakh crore, respectively. In the April-June quarter of 2021 — when India bore the brunt of the Delta wave of Covid19 — capex for new projects stood at Rs 1.55 lakh crore.
In a July note, CMIE had also pointed out that proposals worth Rs 3.57 lakh crore to set up new capacities in the industrial, infrastructural and services sectors were made during the quarter ended June 30, 2022. This was much lower than the proposals worth Rs 5.91 lakh crore that were made in the preceding quarter which ended on March 31, 2022.
On providing support to the MSMEs, she said, “…I know I am treading in a dangerous, land-mine ridden area, it is not just what the government can give…all of you can equally help. We wanted payment to go to MSMEs in due time… I spent a lot of time going through it (the data). I was surprised to find that a considerable pending payment was also from the big industries,” she said.
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Sitharaman said while she could push public sector undertakings (PSUs) and departments and can request states, she can only appeal to the industry. “For all the tears that we shed for the MSMEs, can we limit the time by which the MSME get dues?,” she said.
According to CMIE data, higher topline growth played a key role in growth in profits of Indian listed non-banking companies in the June 2022 quarter, with better utilisation of existing assets helping fuel much of this growth. For three consecutive years since 2019-20, growth in sales has been fuelled by growth in better asset utilisation and the contribution of growth in assets has been negative, according to CMIE.
