Nirmala Sitharaman rules out quick recovery for economy

New Delhi: Finance Minister Nirmala Sitharaman said it was too early to say if the slowdown in the economy had bottomed out.

Companies are planning new investments after $20 billion worth of corporate tax cuts announced in September, Sitharaman told reporters in New Delhi on Friday. Actual investments may take some time to materialise, she said.

Prime Minister Narendra Modi’s government has unveiled several steps since August to revive economic growth from the weakest pace since 2013. The surprise decision to lower taxes for companies raised concerns about fiscal discipline, with Moody’s Investors Service cutting the country’s sovereign debt outlook to negative last week amid concerns over slowing growth and revenues.

Sitharaman said it’s a bit too soon to say whether Asia’s third-largest economy would be able to stick to its fiscal deficit targets. However, the government’s asset sales program — key to plugging a gaping hole in the budget — is moving ahead comfortably, she said.

Government intends to bring the nation’s cooperative banks under the purview of the Reserve Bank of India, she said. Currently, state governments share regulatory functions with the central bank over cooperative banks, many of whom are failing because of fraudulent lending practices.

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