Need a holistic approach to handling economy: FM

New Delhi: Finance minister Nirmala Sitharaman said there is a need to have a “holistic” approach to handling the economy instead of a “silo-based and myopic approach with blinkers”, responding to a query if it’s time to rethink inflation-targeting and focus more on growth and employment.The government is looking at various ways to provide support to the economy and a fiscal stimulus is possible, she said, while declining to specify any timeframe. “We are definitely looking at different ways in which we can again give some support. I have said that I have kept my mind open about it,” Sitharaman said.Economic activities are reviving though it is too early to tell if the uptick will sustain. “As opposed to what happened in the first quarter, this quarter we are seeing actual revival. It will be too early for me, based on this, to conclude as to how the year will end. We'll have to wait and watch,” the FM said, adding that the government was not waiting for the Covid situation to improve before taking more measures.The government is studying the Vodafone judgement and is yet to take a decision on whether to appeal, Sitharaman told ET in an hour-long interview. “Whilst no one ever denies the right of any sovereign government to decide on amending anything, our faith lies in amendments, but prospective application. We don't believe in retrospective application and that was more than once clarified by Mr Jaitley,” she said, adding that on rolling back the amendment the then finance minister had said that the matter was in court.‘IBC Process Shouldn’t Get Diluted’On the issue of interest waiver on loan moratorium, she said the Supreme Court has been informed that a report from a committee headed by former Comptroller & Attorney General Rajiv Mehrishi is being studied. Asked if the courts should be getting into an issue like this, she said her concern would be to see that the court is seized of all the facts related to how banks function and how depositors need to be cared for in this extraordinary situation.“My concerns would be on that. And I think to an extent, about the depositors and particularly the... economic situation in which the economy is in and the trouble that they are undergoing are well in the cognizance of the court. To that extent, I can see that the court has taken their situation very well into their cognizance,” she said.Commenting on the Enforcement Directorate opposing JSW Steel’s acquisition of Bhushan Steel through the insolvency process, the minister said that though the message going out is not ‘helpful’ she is aware of the facts and there is no intention to send out any negative message about the insolvency law.“My interest is to make sure the IBC process doesn't get diluted in this process… because the IBC has given a good solution," she said.On the issue of stock markets being out of sync with the fundamentals of the economy, Sitharaman said she is not going to judge if the stock market is right or wrong while pointing to the high retail interest as evident from new accounts being opened.“That reality also tells me that probably observation by some people that the stock market is not connected with the ground reality is probably not right. Retail investors coming in such numbers means something is there. Some connect is there. It’s worth watching.”Asked about the global shift away from inflation targeting and emphasis on growth and employment in the monetary policy framework, Sitharaman said there is a need for a more holistic look at the economy.“There is more than one reason now for the economy to be not looked at in silos in which it was looked at in all these years… because each has an interplay into the other. And if the interplay is not allowed, you may not have a fair solution coming, a solution which will have an impact on every side of the economy," she said.The monetary policy framework, which is coming up for review in March, 2021, has set an inflation target of 4% (with (+)2%/ (-) 2%) band for the monetary policy committee.In the case of Vodafone arbitration ruling, it’s a ‘point well taken’ that some experts are saying not appealing the decision will be seen as an investor-friendly move. “We are looking at the judgment, we also understand the appeal has to go to Singapore, if at all we choose to. But, we have not taken a call yet," she said.

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