New Delhi: Nirmala Sitharaman, the union finance minister, asked India Inc on Tuesday what was keeping them from investing in India at a time when the entire country was pouring money into the country. She also raised worry about the issue of huge corporations failing to pay their debts to micro, small, and medium-sized businesses (MSMEs), noting that the government and more established, larger companies must both provide equal support to smaller businesses.
The finance minister's comments come as the government is working closely to push for investment in order to boost the economy of the nation. The Finance Minister compared India Inc. to the mythical figure Lord Hanuman and declared that the government is ready to work with the sector and implement policy.
Who is going to tell Hanuman that he is Hanuman? It can't possibly be the government, Ms. Sitharaman said. "Is it like Hanuman? You don't trust in your own capacity, in your own strength, and there's got to be someone standing next to you and saying you are Hanuman, do it?
Foreign direct investors and foreign portfolio investors are showing confidence to invest in India, she urged, adding, "If it does not sort of impertinent to say this now, I equally would like to know from the Indian industry what it is that they are hesitant about." She made the remarks while speaking at the Hero Mindmine Summit in this city.
The corporate tax rate was lowered, thus it makes sense that the industry doesn't think the environment is friendly. Nevertheless, the finance minister stated, "I maintain defending the industry even when people provocatively ask me what I would like to advise the private sector."
The Indian government launched the Atmanirbhar Bharat programme last year with a major outlay of over Rs. 2 lakh crores for more than 14 industries, including automobiles and auto components, white goods, textiles, etc. "So, this is the time for India. We cannot miss the bus," she added.
In her comments on the current state of the investment environment, Ms. Sitharaman added that businesses who are leaving China and looking to migrate to India are doing so (investing) because they find the Indian policy ecosystem to be far more alluring and conducive to such a move. Favoring small enterprises, Ms. Sitharaman urged major corporations to pay debts owed to MSMEs, arguing that these companies should provide equal support to both the government and larger, more established companies. There are pending payments from Central and state governments as well as Central and state-owned entities, but I was surprised to learn that a sizeable portion of those payments were also owed by large industries, she added. "Support to the MSMEs is not just what the government can give. It is certainly largely dependent on that.
It was encouraging that larger companies were including the amounts owed to MSMEs in their annual statements, but they insisted that they also needed to clear these dues, Ms. Sitharaman said. "I can only appeal to the industry. For all the tears that we shed for the MSMEs, can we limit the time by which the MSME get dues?" she added.
With 65.73 percent of their payments being late, MSMEs are the most severely affected. According to statistics, India's MSMEs owed 10.7 lakh crores in debt as of the end of 2021. Private clients, governmental agencies, and PSUs are the sources of the payment delays. Micro and small businesses owe 8.73 lakh crores of this total, or 80% of the outstanding debt.
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