No. PR- 224
February 17, 2021
The Government has managed to clean its Accounts in the Budget: Dr. Pronab Sen
The government has managed to clear all its liability which was anywhere between Rs 1.7 lakh crore and Rs 3 lakh crore in terms of outstanding payments and create credibility back for the government which was lacking earlier stated, Dr. Pronab Sen, Programme Director, International Growth Centre (IGC) and Former Chairman, National Statistical Commission at an interactive virtual session organized by the PHD Chamber of Commerce and Industry (PHDCCI).
Speaking at the event, Dr. Sen mentioned that it was welcoming to see that the central government took radical steps to ensure that its books are healthy. Most of the earlier governments used to go reasonably slow on making payments for the work done by the private sector. While the delay in the payments started off from 4-5 months and then later went off to 8 and 10 months, it kept getting delayed further which resulted in the working capital cycle getting widely off- schedule for the companies in the private sector, he said.
According to Dr. Sen, the whole process resulted in these commercial sectors factoring in these costs while applying for future government tenders. This also resulted in a huge escalation in costs, said Dr. Sen
A lot of the payments in the fiscal stimulus package were actually the repayment of these outstanding bills. It’s a great step that the government has taken now at this time of the crisis. If the government would have delayed it further even by one year, then every rating agency in the world would have given us a junk bond status, said Dr. Sen
Dr. Sen further mentioned that in the financial budget a lot of crucial things fail to find mention like the employment figures and the MSME initiatives. According to the CMIE data, there would be additional employment of 15 to 18 million workers. Unlike earlier years, this year there has been no mention of the same in the budget.
Also, though there is a fleeting mention of the MSME sector, we don’t find any concrete measures for the sector in the financial bill, he sad
He explained that during financial slowdowns earlier, a lot of small entrepreneurs used to survive due to the Mudra loans. While the larger corporations would still find access to borrowings now, the MSME sector still faces issues as far as credit is concerned. Unless steps are taken for the sector to bounce back, in the next 2-3 years, we can expect a huge stagnation in demand for goods and services, he said.
Speaking at the Managing Committee, Sh. Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry said that the historic Union Budget 2021-22 presented by Mrs Nirmala Sitharaman, Hon’ble Finance Minister has very much considered the aspirations of all sections of the society for the improvement of standards of living, good health for all and ease of doing business for industry. The growth oriented, welfare inducing and employment creating budget will go a long way to rejuvenate the economic growth trajectory and put India as a bright spot in the global charts.
Sh. Pradeep Multani, Senior Vice-President, PHD Chamber, Sh Saket Dalmia, Vice President, PHD Chamber, Former Presidents of PHD Chamber, Managing committee Members of PHD Chamber and Chairs and Co-Chairs of experts committees participated in the interactive session with Dr. Pronab Sen.
PHD Chamber of Commerce and Industry