Centre taking up reforms despite pandemic: Nirmala Sitharaman

‘The sum and substance of what began in March 2020 with Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY) has again been extended from this March till November, and the Central government has been very proactive in responding to the challenges (caused by COVID-19),’ Sitharaman said.

Speaking to reporters here, she said, ‘From a stage when we did not even manufacture PPE, had not enough ventilators or sufficient centres to test virology samples, we have walked a long course’.

‘From March 2020 to June 2021, the support that needs to be given to the poorest of the poor is being extended, other than that providing stimulus for the economy is happening.

Simultaneously, the Reserve Bank is also monitoring and extending credit support, but above all this, the opportunity to continue with the reforms is there,’ she noted.

Pointing out that ‘as we are marking the 1991 economic liberalisation’s 30th anniversary, some of the substantial reforms are being taken up by the government, the Finance Minister said the reforms have continued despite the pandemic.

‘Whether it was in the last tenure when you had GST and IBC (Insolvency and Bankruptcy Code) passed, or this tenure when you have agriculture Bills which have now become Acts, labour codes, mining sector reforms, reforms to financial sector, reform to distribution network of power, are all being undertaken even during the pandemic,’ she added.

Sitharaman today concluded a two-day tour of Karnataka where she reviewed ongoing projects, interacted with industry leaders from the biotech sector, and also reviewed some of the vaccination and COVID infrastructure in the State.

Responding to a question on increasing fuel prices, and whether the government was considering reducing excise duty on petrol with prices crossing Rs 100 per litre in several cities, the Minister said the duties on petrol are levied both by the Centre and the State and both would have to work together on this.

‘The Centre levies a fixed amount, whereas the States increase the rate as prices rise up…now as everyone is aware the per barrel price in dollar terms has gone over and above 75-76 US dollar per barrel. So this issue of fuel price is fairly layered, the Centre and State will have to work together,’ she said.

To a question on bringing petroleum products under GST, Sitharaman said there are no hurdles from the Centre’s part, and the GST council would have to take a call.

‘Even when the GST was launched, there was an enabling provision made in the constitutional amendment that as and when the council decides, it can always fix the rate and put it there in the GST. Once the GST council decides, it will just be taken on board, amendment is not required again,’ she further said.

To a question on extending GST compensation, Sitharaman said a special session of the GST Council would discuss this issue of extension, if any, after July 2022.

Regarding pending GST compensation to States, she said, ‘As per the discussions held in October 2020 with all the States on loss of revenue, and as a result of lack of money to pay the compensation, a formula was arrived at and based on that formula for the year 2020-21 whatever was agreed to be given through back-to-back borrowing has already been given.’ ‘The residual amount will be paid, either this year if we get better revenue or next year depending on the situation,’ she added.