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This article is more than 1 year old.

Govt will do more on stimulus to tackle slowdown, says FM Nirmala Sitharaman

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Finance minister Nirmala Sitharaman said her attention will be doing more on stimulus as the government tackles a crushing slowdown gnawing at the economy.

Govt will do more on stimulus to tackle slowdown, says FM Nirmala Sitharaman
Finance minister Nirmala Sitharaman said her attention will be doing more on stimulus as the government tackles a crushing slowdown gnawing at the economy.
"I'd like to believe there is a recovery in some sectors but others still need some help," Sitharaman said at the Hindustan Times Leadership Summit in New Delhi on Saturday. "My focus is on ensuring more is done for more stimulus," she said.
India's annual economic growth slowed to 4.5 percent in the July-September quarter, its weakest pace since 2013. But contrary to expectations, the Reserve Bank of India (RBI) kept its key lending rate on hold on Thursday.
"So there are ways in which for giving stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries labour and so on," she said.
Besides, she said, the public sector banks have disbursed nearly Rs 5 lakh crore without compromising on prudential norms in the last two months to boost consumption in the hinterland.
"So there are ways in which for giving stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries labour and so on," she said.
Asked if there could be more measures announced to bolster economic activity, she said, "If I say yes, it will be when and if I say yes it's also going to be back to me saying are you not too close to the budget. So I don't want to say yes although I am wishing I can say. At the same time, I will not say no, because we are working on more."
The GDP numbers had shown government spending is helping to prop up weak demand while private investment growth had virtually collapsed, with a crisis in the shadow banking sector causing illiquidity in the economy.
Annual retail inflation rose to 4.62 percent last month, climbing above the mid-point of the RBI's target range of 2-6 percent for the first time in 15 months.
The government has radically cut corporate tax rates and announced mergers involving ten state-owned banks in a bid to strengthen a banking sector struggling under a mountain of bad debt, and to boost lending. It also approved 100 percent foreign investment in coal mining and eased rules in the contract manufacturing and single-brand retail sectors.
But despite the FM's comments, a stimulus will have to wait until the budget. On Saturday, Sitharaman said she didn't want to say yes to more stimulus because the budget is fast approaching.
 
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