The one word that defines Finance Minister Nirmala Sitharaman is grit. For people from Kerala, Sitharaman’s lasting image is that of her facing a group of irate fishermen at Vizhinjam near Thiruvananthapuram (where an international seaport is now coming up) just after the Ockhi cyclone fury in December 2017.

The community was agitated by what it perceived to be official indifference and even the State’s own political leadership had been shooed away by the belligerent crowd. But the then Defence Minister held firm, addressed the crowd in Tamil and won all-round praise for managing the situation, on the spot.

Now, Sitharaman is weathering a storm of a different kind — trying to put our economic house in order, as India copes with the Covid pandemic.

Last week’s Atmanirbhar 3.0 gave indications that her Ministry and the government have a design, a larger strategy and unity of purpose in trying to address the Covid fallout. There are no perfect solutions and an unprecedented event of this nature does not harken to textbook solutions. There has to be a bit of trial and error.

One is aware too of criticism that the earlier Atmanirbhar announcements have failed to fire up the economy. Another Direct Benefit Transfer of ₹500 to women Jan Dhan Yojana account-holders ahead of Diwali would have revved up the spirit and made the package a well and true festive gift for the poor just by adding ₹10,000 crore (₹500 for 20 crore women). If the government’s think tank missed Diwali, there is Makar Sankranti, another pan-India celebration, coming up in early 2021. So there is still hope of cash transfer.

But overall, the booster pieces are falling into place. Recent economic data affords scope for optimism and hope. A revival seems to be taking shape, albeit slowly. In any case, one of the largest economies in the world has to pick itself up and grow.

In crises like these, conviction in communication and body-language are as important as the message itself. During the Atmanirbhar presentations the Finance Minister makes her remarks in English and her Minister of State Anurag Thakur puts it into Hindi, adding his own touches.

She is flanked by a battery of top bureaucrats who run North Block. Among them are Secretaries Debashish Panda (Finance), Ajay Bhushan Pandey (Revenue), Tarun Bajaj (Economic Affairs) , TV Somanathan (Expenditure) and Tuhin Kanta Pandey (Disinvestment).

What is remarkable is that the Team speaks with one voice, internalising the spirit of Atmanirbhar and ready with data to back up the presentations.

From the depths of the lockdown induced contraction, high frequency indicators point to a lift-off . It is reasonable to state that the government’s infusion of cash into rural India from the first two packages has hit the mark.

The PM Kisan cash transfers amounted to about ₹38,000 crore and direct transfer to about 20 crore women Jan Dhan account- holders aggregated to ₹31,000 crore. On November 13, the Finance Minister said the government had spent ₹73,500 crore on MGNREGA payments. Clearly these are all benefits for the marginalised when they need it most.

This is cash infusion of unprecedented proportions for rural India. This is in addition to the free 5 kg of rice or wheat per person and 1 kg of pulses per person per month to about 80 crore beneficiaries under the PM Garib Kalyan Yojana. Though some States have weak public distribution systems, in a large country like India, the government has largely ensured adequate food, cash in hand, stimulated rural demand and supported farmers.

Encouraging signs

Take three quick indicators.

The Fitch-owned rating agency Ind Ra sees a 10-12 per cent y-o-y growth in tractor sales in 2020-21. In both September and October, the number of tractors sold exceeded 1,00,000 against the monthly average of about 70,000-80,000.

Fertiliser sales are expected to be higher by about 10-15 per cent this financial year. Atmanirbhar 3.0 has hiked outlay for fertiliser subsidy by ₹65,000 crore, almost double the original estimate.

ICRA has stated that the recovery in GST collections in September and sales of petrol and diesel “provides a meaningful signal of a broader economic revival”.

If all this fructifies, then the Finance Minister can justifiably claim that the revival packages have been a success.

To ensure adequate liquidity in the system, the government had provided guarantees for credit disbursals to all major sectors like MSME, agri infrastructure, street vendors, NBFCs and given liberal terms of repayment. Bank loan data for recent months show disbursals rising and drawals increasing, validating the premise of the guaranteed-credit push..

Just hours before the Finance Minister’s latest announcement, the RBI had come out with its monthly bulletin. Though the media had highlighted the very obvious comment on a recession (two quarters of negative growth was anyway a given), the most positive feature of the report was in the opening paragraphs.

A survey of nearly 900 non-finance companies showed operating and net profits rising in September 2020 even though revenues had slowed. Cost cutting had helped these firms.

While the details of the latest package including the Production Linked Incentive Scheme, the additional outlay for PMAY, the EPF support for new hires, etc., are already in the public domain, what was discernible was the quiet confidence of Team North Block.

In the press conference, the Finance Secretary said the new credit support for the 26 stressed sectors would draw from the balance in the earlier ₹3-lakh crore Guaranteed Credit Scheme but “if there is further demand, we shall see”.

The government’s quick response to industry demands, constant dialogue and feedback from the ground give hope that the second half will turn out to be much better for the Indian economy, in an otherwise very difficult year for the world as a whole.

The writer is a top public sector bank executive. Views expressed are personal.

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