'The answer is not for me to give. The answer either way has to be heard from the industry itself. Tell us why not if you are not doing it; tell us if you are doing it -- why should this question remain unanswered?'
Finance Minister Nirmala Sitharaman on Thursday said the government would like the corporate sector to ramp up investment while maintaining that they are the best judge of commercial assessment.
Speaking at Business Standard Manthan, Sitharaman said India Inc should talk about what is stopping them from speeding up investment, if at all.
“I strongly believe the Indian corporate sector is the best judge of investment and commercial assessment -- of when to put the money, where to put the money, and how much to put. Yes, we would like them to be speedier... What I am missing is why the corporate sector is not speaking about it. The answer is not for me to give. The answer either way has to be heard from the industry itself. Tell us why not if you are not doing it; tell us if you are doing it -- why should this question remain unanswered?” she added.
However, Sitharaman said the government will keep doing its job.
“I will invest, I will spend on capital expenditure. It is the government that realises that India has to catch up with what’s been missed out on for nearly 50–60 years -- the pace at which infrastructure, which is the core of economic development, needs to be strengthened,” she said.
Saying that global trade is set for a complete reset, Sitharaman said India must ramp up bilateral relationships with friendly countries, as bilateral arrangements are becoming the order of the day while multilateral institutions increasingly fade away.
The finance minister said bilateralism is becoming the default choice of many countries. “India must also understand that we have to ramp up bilateral relationships with many countries, not just for trade and investment but also for strategic relationships. So, multilateralism is sort of out, and bilateralism is the only catalytic tool we can use,” she said.
Sitharaman said global trade is going to be completely reset, whether one likes it or not, as the World Trade Organization (WTO), once an anchor, is no longer available, and non-discriminatory tariffs under the most favoured nation (MFN) status are fading away.
“There is no more MFN. Every country wants to be treated specially. We have to go that route. Your trade has to grow, and your supply chains also have to be ensured. That’s not going to be possible anymore if strict MFN rules apply without the powerful presence of the WTO. We need to rethink MFN and the bilateral arrangements we have with countries,” she added.
The finance minister said the new world order has not yet been established and is undergoing a profound churn.
“It is not a systematic churn -- it’s a bit violent. But you have to participate in it; you can’t just stand and watch. India is conscious that it should be in a position of reckoning as this churning happens. As the global reset takes place, we shall put India’s interests first and at the top. So, it can’t be India’s clichéd approach of non-alignment, though I am not rejecting the concept,” she added.
Sitharaman said India can contribute to this reset. “We have to keep our strategic requirements at the top of the agenda. These requirements are also heavily influenced by our geopolitical positioning. We have no choice -- we can’t reposition ourselves,” she said.
The finance minister said that in matters of technology, India is well-placed and can be a leader in many aspects.
“We have proven to the world that when we talk about technology and its deployment, we do it at a population scale. India can extend a helping hand to many of its bilateral partners with whom it seeks to strengthen ties. That will create a new group -- the tech group. A global technology group with India’s leadership can make a big difference worldwide, and that is where India should be steady and clear-minded,” she added.
Sitharaman said India must prioritise investment in technology and talent, as the cost is so high that not every country can manage it.
“Talent is required to advance technology. It is not confined to a geographical territory or a sovereign nation. When it comes to talent, people can pool and repool themselves regardless of sovereign loyalties. It’s one thing to skill up your own people, but we also need to attract talent, and we have to be very open-minded about it. We should not feel insecure that it might take our people elsewhere -- we must invite talent from wherever it comes,” she said.
The finance minister said that although developed countries have money, it will not be sufficient for technology and talent.
“The global order will not be determined by the Global North or developed countries. Technology and the movement of people are no longer threats -- you can do what you want from where you are. Therefore, migration patterns and workforce mobility will be completely reshaped. We are looking at a totally different world emerging sooner than we expect,” she added.
Sitharaman said the government must continuously address the aspirations of the poorer segments, the middle class, and entrepreneurs.
“There is no way the government can say that due to uncertainties, we need to prioritise our needs. We still have to improve our fundamental infrastructure. It’s not just about roads, ports, and airports -- it’s also about connectivity and ensuring equal development across all regions,” she said.
Emphasising the need for reforms, Sitharaman said reforms cannot be the sole agenda of the Union government and must be taken seriously by state governments as well.
“I want healthy competition among states, where each can say, ‘My economy is better than the others’. The strength of the economy and the way fiscal management is handled must also distil down to the states,” she added.
On the Budget announcement regarding financial and non-financial sector regulations, Sitharaman said regulations that fall in the cracks between two regulators never get addressed.
“It is in this context that we wanted to ensure that for the non-financial sector, we have some kind of oversight to clean up these gaps so that everybody functions as part of a larger wheel,” she said.
Without naming any regulator, Sitharaman said the government has taken up issues where regulatory overreach has gone too far. “In such cases, we want a group of people to look into it,” she added.
Feature Presentation: Rajesh Alva/Rediff.com
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