Finance Minister Sitharaman’s clear policy on India-US trade deal: Security of farmers and dairy sector paramount.
As trade talks between India and the US are gaining momentum, the central government has made it clear that it wants to enter into a significant, balanced and transparent trade agreement. Finance Minister Nirmala Sitharaman indicated in an exclusive interview to Financial Express that India is ready to partner with strong economies globally, but the agriculture and dairy sectors are the country’s “red lines” that cannot be crossed.
“We would like to enter into a big and beautiful trade agreement”
Responding to a question on a possible trade agreement (Bilateral Trade Agreement – BTA) with the US, Sitharaman said, “Yes, we would like to enter into an agreement – a big, good, beautiful trade agreement; there is no harm in it.” According to her, India’s economic aspirations and dream of becoming a developed nation by the year 2047 can be realised only through such agreements.
She further said that India’s focus is to protect the sectors that are the foundation of the country’s social and economic structure. Especially agriculture and dairy, where the livelihood of Indian farmers and livestock farmers may be at stake. In such a situation, the government is being very cautious before giving more access to the US in these sectors.
Status of private investment and economic growth
Sitharaman also acknowledged that the pace of investment in the private sector was slow till some time ago, but now a positive change is being seen in it. She said, “In the last six months, there are clear signs of private investment and capacity expansion. Companies have no shortage of cash — they are more confident about investing than before.”
Improvement in urban consumer sentiment
When asked what steps the government is taking to deal with the economic slowdown in urban areas, she said, “There are signs of improvement in consumer behavior since April, especially due to income tax relief, people’s willingness to spend has increased.” This is likely to boost domestic demand, which is necessary for economic growth.
Second generation reforms and new direction in nuclear energy
The Finance Minister talked about the beginning of “second generation reforms” in the coming time, which includes steps like strengthening public sector banks, promoting private investment in the nuclear energy sector, and land-asset monetization for infrastructure.
Talking about nuclear energy, she mentioned the plan for small modular nuclear reactors, which will help in improving energy efficiency and meeting the growing demand. She also made it clear that to move forward in this direction, amendments to the laws in Parliament are needed, on which the government will take action soon.
Possible reduction in GST rates
Sitharaman indicated that the government is committed to making the GST framework more simple, rational and easy to comply. She said that now the time has come to make the tax system such that both the common businessman and the industry can easily follow the rules. She emphasized that if the average GST rate is reduced to some extent, it can increase revenue rather than reduce it.
She said, “Many countries have proved that the economy can be boosted even with low tax rates. India can also follow this path.”
Decrease in CASA rates of banks and solutions
Sitharaman also admitted that the pace of increase in the current account-saving account (CASA) rates of banks has slowed down, due to which banks are facing difficulty in raising cheap capital. Considering this challenge serious, she said that banks are now trying to make a difficult balance – on the one hand there is a demand for cheap loans, and on the other hand there is also a need to give better returns on deposits.
Giving suggestions on this, she said, “CASA is an affordable capital source, and banks will have to adopt creative ways to maintain it, especially when people are increasingly getting attracted to the stock market.”
Challenge for states to attract investment
The Finance Minister advised all the states to create a favorable environment for investment, so that equal development can take place in all parts of the country. He warned that if some states lag behind, the possibility of investment there will be reduced and the local people will have to bear the loss.
Fintech and rural India
He also said that fintech companies should not look at rural areas and agriculture sector only from the perspective of social responsibility, but should adopt them as potential markets. This will help in the rapid spread of digital services in villages and will strengthen financial inclusion.
This interview of Nirmala Sitharaman makes it clear that India wants to move forward with its economic strength and strategic priorities on the global stage. While on the one hand there is talk of open trade agreements with strong partners like America, on the other hand the protection of the country’s farmers, livestock farmers, and domestic industries has been given paramount importance.
The government’s approach is balanced – adopting global partnerships on the one hand and protecting domestic interests on the other. Agriculture, dairy, GST reforms, changes in nuclear energy, private investment, etc.
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