Some Sectors Still Need Intervention, Govt Working on Another Stimulus Package, Says Finance Secretary
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The Modi government is preparing another stimulus package and is now looking at sector-specific interventions by engaging with stakeholders, Finance Secretary Ajay Bhushan Pandey said on Monday. "Our approach, right from the onset of the pandemic, has been to study the situation, determine the need of the hour, gauge who needs assistance or stimulus or intervention, what is needed, which section of the industry, which section of the population, and then come out with that response," Pandey told moneycontrol in an interview.
He added the impact of the series of packages announced by Finance Minister Nirmala Sitharaman is now visible. "It has been a case of continuous monitoring and also continuous response, and that is why the finance minister came with a series of packages and stimulus periodically. We can see the results now, we can see their impact," the finance secretary was quoted as saying.
He added the Centre is continuing to receive suggestions, because there are still certain sectors which may be needing interventions.
"We are having discussions with the stakeholders concerned --industry bodies, the ministries, small and medium enterprises and various other sectors. The finance minister has already said that we will not left wanting if certain interventions are needed. We have to identify the sectors which need interventions. That is precisely why we are having discussions with stakeholders." he said.
Last month, it was reported that the government is likely to announce another round of stimulus measures for industries hit by the Covid-19 pandemic ahead of Diwali. The measures may include a push for infrastructure with urban projects in focus, extension of the production-linked incentive (PLI) scheme to more sectors, and sector-specific interventions in hospitality and tourism industries. The stimulus package will be the fourth set of measures since March.
On the GST compensation issue and why the Centre could not decide earlier to borrow, Pandey said that the central government always maintained that it will create a special borrowing window within the parameters of Article 293.
"When we are saying that the Centre will borrow and will pass it on back to the states, this is the special borrowing window. Ultimately, the borrowers in this case are the state governments, it is in their books of accounts, and the guarantee is the Consolidated Fund of the State. So, therefore, let us not get into the question of a change in the stance. What we have to see is that, whether the special window facility has been provided by the Centre for facilitating loans to states," he told moneycontrol.
Talking about the way forward regarding the states which have not accepted the compensation borrowing options, he said that the finance minister has written to the chief ministers of the states and requested them to join the scheme. "At the official level, we continue to remain engaged with those estates and we will continue to try and convince them so that they can avail the loans as soon as possible," Pandey added.