“We are getting inputs from various sectors and trying to respond, so that confidence of those sectors is restored,” the minister said. “The essential idea behind the meeting is to hear from them and quickly after that come up with something which can help them.”
She was responding to queries about the government’s response to the slowdown after meeting officials of public and private sector banks in the capital on Monday. She’s meeting representatives of the automobile, capital markets, real estate, and small and medium enterprises sectors this week.
Growth in the eight key core sectors slowed to 0.2% in June, the lowest since December 2015. Automobile sales have touched decadal lows.
“We want to show that we have heard them and we will respond to them,” Sitharaman said. “Whether all their expectations I’ll be able to meet or not… and certainly come with responses having heard each one of them.”
‘Open to Hearing Out FPIs’
Asked about the resolution of bankruptcy cases involving a large number of home buyers in the real estate sector, she said the government is working with all concerned to resolve these in favour of the purchasers.
After the Supreme Court decision in one case, a group of ministers held a meeting with the respective civic authorities and officials, she pointed out, likely referring to that involving the Amrapali Group.
“We’ve had very extensive meetings so that home buyers in the NCR (National Capital Region) are not going to be stuck without resolution,” Sitharaman said, adding that work is on for providing some kind of solution to the matter of home buyers being left in the lurch by such developers.
The ministry later issued a release to the effect that, after meeting bankers, Sitharaman will engage with medium small and medium enterprises (MSMEs), the automobile sector, industry associations, financial market stakeholders, real estate and home buyers.
“Government will factor in the takeaways from these consultations for appropriate policy responses to maintain a high growth trajectory and to address sector specific issues,” the ministry said.
The finance minister noted that no decision had been taken on the issuance of sovereign bonds overseas that was proposed in the July 5 budget.
“I know some numbers were floating around because the earlier secretary had mentioned it,” she said. “After the mention in the budget, there has not been much work on it because we have been busy with passing the three bills,” she said, referring to key items of legislation. She added that the overseas bond plan was only at the stage of an announcement.
“I am not speculating on the tranches, number, amount–nothing of that has been decided,” she said.
FPI TAX SURCHARGE
Sitharaman observed that economic affairs secretary Atanu Chakraborty will soon hold discussions with representatives of foreign portfolio investors (FPIs), when asked about the increased levy on them.
The government increased the surcharge in the budget from 15% to 25% on taxable income between Rs 2 crore and Rs 5 crore, and from 15% to 37% for income above Rs 5 crore. This covers FPIs operating as trusts or as association of persons, which has added to the volatility on the bourses.
“I have made it absolutely clear that if there are FPIs who want to tell me something about, I am quite open to hearing out what they have to say,” the finance minister said, suggesting that she may also attend the meeting.
PUBLIC HOLDING LIMIT
Sitharaman said the regulator has sought the views of stakeholders on her budget proposal to increase the limit on public holdings in listed companies to 35% from 25%.
“The Securities and Exchange Board of India (Sebi) has started the process of hearing various stakeholders on the matter,” she said. “It is only at that stage and there is nothing beyond that. From the ministry we have not initiated anything.”
BANK TAX ISSUES
The finance ministry statement said that the banks raised issues they have been facing over service tax and these will be examined by the government.