Economy Witnessing V-Shaped Recovery Due to Government’s Efforts: Rajnath Singh

Raksha Mantri Shri Rajnath Singh addressed a workshop on financial market organised by the Lucknow branch of Central India Regional Council (CIRC) of Institute of Chartered Accountants of India (ICAI) in Lucknow, Uttar Pradesh on May 14, 2022. The workshop was organised to update the participants about the new developments related to the economy and train & motivate them to deal with future challenges related to the sector.

Shri Rajnath Singh commended the contribution of Chartered Accountants (CAs) in steering the commercial ecosystem of the country in the right direction, describing them as the backbone of financial management and auditing of the economy. “Just like our Armed Forces personnel who protect the country’s borders with sheer bravery and dedication, our CAs are the conscience keepers of the financial system. The CAs must ensure honesty while imparting their duties as they are the keepers of the people’s trust in financial institutions”.

The Raksha Mantri was of the view that the world economy is going through a very difficult phase due to the supply chain disruptions and logistical bottlenecks caused by COVID-19 pandemic and now the Russia-Ukraine conflict. “Russia and Ukraine are important commodity producers. Russia is a major producer of food grains and hydro-carbons, while Ukraine is an important producer of wheat, etc. Therefore, the ongoing conflict has impacted the whole world. Since we import hydro-carbon and oil-seeds in large quantities, their prices have affected our country. Food & fuel prices have gone up. Core inflation has also increased due to the global supply chain and other logistical bottlenecks,” he said.

Noting that the disturbances and uncertainties caused due to COVID-19 reduced private consumption expenditures, Shri Rajnath Singh asserted that the Government has initiated a number of steps to deal with these challenges and the results are visible. “According to surveys of many agencies, India continues to grow as one of the fastest growing major economies in the world. Our exports continue to set new records and are likely to increase further. A major free trade agreement has been signed with Australia and similar agreements with other partner countries as well,” he added.

The Raksha Mantri also spoke of the gross GST revenue collection which was the highest ever at Rs 1.68 lakh crore for April 2022. He defined tax collection as a means of completing works of public interest and said the same revenue is reaching more than 80 crore people in the form of free food grains through ‘Pradhan Mantri Garib Kalyan Anna Yojana’ during the COVID-19 situation. He added that new investments are being made at the global and domestic level which are expected to ease the pressure on the supply chain.

Throwing light on the PM Gatishakti – National Master Plan for multi-modal connectivity introduced by Prime Minister Shri Narendra Modi, Shri Rajnath Singh termed it as the Government’s long-term response to logistical bottlenecks. He said, an expenditure of up to Rs100 lakh crore has been envisioned to execute this master plan.

The Raksha Mantri stressed that construction of infrastructure projects like roads, railways, airports, ports and shipping is one of the top priorities of the Government, adding that the Production Linked Incentive Scheme has led to an increase in private investment which will strengthen the demand in the economy. He also mentioned about the direct income support to farmers, PM KISAN, and other income support interventions which aim to provide a fillip to the private consumption expenditure.

Shri Rajnath Singh asserted that due to these efforts, the domestic demand, whether it is related to investment or consumption, is rapidly increasing. “We are witnessing a V-shaped recovery after the pandemic. Our focus on infrastructure and logistics has started to remove bottlenecks on the supply side. Contact-based services are also gaining momentum due to the success of our COVID-19 vaccination drive. This is a good sign for our economy to come back on track,” he said.

The Raksha Mantri shared insights on the key aspects required for the growth of the economy, namely skilled human resource; capital; technology; market and institutions such as Rule of Law, independent courts, free press and regulatory system. He pointed out that the Government has taken a number of measures to strengthen these aspects.He said, to strengthen the human resources, the Government launched National Education Policy 2020 and set up new IITs, IIMs, polytechnic colleges, medical colleges and increased the number of medical seats.

Shri Rajnath Singh further stated that bold steps such as merger & privatisation of banks and capitalisation of public sector banks has ensured that banks, which were facing losses due to Non-Performing Assets or other reasons, are now in a position to provide loans. “We have developed venture capital funding for start-ups, which is important for their hand-holding at the early stage.The success of the startup-based innovation ecosystem is evident from the fact that the number of Unicorns in the country has crossed 100. We have encouraged retail investors and put an end to insider trading. Use of technology and digital architecture in the trading process is being promoted to make it more transparent,” he said.

In order to promote technology, the Raksha Mantri said, the Government is undertaking reforms in R&D establishments such as Defence Research and Development Organisation (DRDO) and Council of Scientific & Industrial Research (CSIR). He stated that a link has now been established between academia and the industry so that the researches being conducted in colleges/universities reach the industry and both parties reap the fruits of progress.

Describing start-ups as a major vehicle of innovation, Shri Rajnath Singh said, it is the Government’s duty to hand-hold and take them forward. He exuded confidence that the Innovations for Defence Excellence (iDEX) and its recently launched version - iDEX Prime – will ensure the growth of innovators and start-ups as these initiatives are providing a good exposure to them.

The Raksha Mantri reiterated the Government’s resolve of providing a market to the industries, describing it as an important facet of the Prime Minister’s vision of ‘Aatmanirbhar Bharat’. He stated that a number of steps have been taken to encourage procurement from domestic players. This is not just catering to the domestic needs, but fulfilling international demands as well, in line with the vision of ‘Make in India, Make for the World’. He added that all efforts are being made for domestic companies to enhance access to foreign markets, so that they can make a mark in the international market.

Shri Rajnath Singh also spoke of the steps taken to strengthen the institutions and transform them into business facilitators. These include Insolvency and Bankruptcy Code which provides easy exit to vulnerable businesses, so that the trapped assets can be unlocked and deployed afresh for economic growth.