Finance Minister Nirmala Sitharaman addressed the Parliament yesterday to inform the houses that the economy is indeed seeing signs of growth. She further assured that the Narendra Modi government remains committed to strengthening the economy and keeping the growth afloat.
Addressing the Parliament, the Finance Minister listed out indicators to highlight how the green shoots of growth have re-emerged. Foreign Direct Investment of $24.4 billion in April to November of 2019-20 came into India, compared to $21.2 billion (during) the same period the previous year. Similarly, PMI index for the manufacturing and services sector has seen a sharp rebound (reaching eight year highs as reported by us earlier), GST collections crossing ₹1 lakh crore again (reported by us here), rising forex reserves with the Reserve Bank of India and the buoyancy in stock markets were some of the indicators that demonstrate how the economy is on the right track, as pointed out by Sitharaman.
The Finance Minister had also listed out the various steps with which the Modi government remains committed to supporting growth, with a special focus on the MSME sector. She listed out steps being taken since July 2019, including the Budget 2020 and the RBI announcements that have granted special concessions to ensure that growth in this space does not get stymied in any sense.
“The Economy Was in Peril Under Competent Doctors”
Sitharaman also took a dig at former Finance Minister and Rajya Sabha MP P Chidambaram, who had called the government “incompetent doctors”, pointing out how the UPA had mismanaged the economy and pushed it to the brink.
“Some hard truth you will have to be hear. 2008-09 fiscal deficit was 6.1 per cent, 2009-10 – 6.6 per cent, 2010-11 – 4.9 per cent, 2011-12 – 5.9 per cent, 2012-13 – 4.9 per cent, 2013-14 – 4.5 per cent. So when we are talking about fiscal deficit, let us please concentrate and understand when economies are managed by very competent doctors,” she said.
She further listed out specific details on how the economy was mismanaged under the UPA government which the Narendra Modi government inherited in 2014.
- NPA ran into lakhs of crores. Retrieving them and answering questions on how much has been brought up and action taken. We getting them back.
- Inflation was in double digits including food inflation under UPA. In contrast, Modi government kept inflation under 4 per cent, and food inflation never crossed the acceptable threshold.
- Between 2005-06 and 2011-12, oil bonds were issued each year by the UPA government, creating a cumulative debt of ₹1,40,000 crores, equalling 1.9% of the GDP then. The NDA government is still paying for this in the form of ₹9,900 crores annual interest on these bonds. Further, the government shifted its liability to oil market companies to hide deficit in the books. The Modi government has in fact ushered in transparency by putting the real numbers out for all to see.
- Flight of capital was massive under the UPA. In 2012-13, the net FDI inflows contracted sharply. In fact, it was pegged at -36%, indicating money left the country. This happened on the back of free trade agreements (FTAs) which were signed by UPA that ended up harming India, as pointed out by several experts and ministries and even the former CEA Arvind Subramanian. The Modi government has since been renegotiating these FTAs.
- Harassment and criminalization of the Income Tax Act was a gift of the UPA era. Even in the Companies Act 2013 a large number of criminal provisions that hurt business sentiment were introduced, and the Modi government has been working day and night to clean up the mess.
Modi Government Remains Committed to Sabka Vikas
Finance Minister Sitharaman also reiterated the government’s commitment towards welfare of all. She specifically pulled up the Congress on the false allegation on the number of toilets disappearing in Madhya Pradesh by bringing out the Congress led government under Kamal Nath. As she noted, the Congress MPs had alleged that more than 46,000 toilets had disappeared across the state; however, in reality, the state government replied that only 649 were actually missing. The Kamal Nath government also assured the Sitharaman in a written reply Since all financial benefits were paid through DBT (Direct Benefit Transfer) and missing ones will be accounted for.
On the allegation that Mid-day meals were not being given to children, Sitharaman pointed out 2018-19 data which showed that the actual expenditure on scheme was ₹9,514 crores, and that allocation has been increased even further, with scope kept for much higher amounts to be given out if needed, with at least ₹11,000 crore being committed to the scheme
On the question of capital and revenue expenditures, Sitharaman pointed out that revenue expenditure going up is not always a negative factor, since it also included the expenditure on human capital development, especially for building schools and hospitals which have been identified under the Budget 2020. Further, under the revenue expenditure head, all central government welfare schemes valuing ₹3.4 lakh crores are accounted for. In fact, revenue expenditure has gone up by 16.5% at a time when it is most needed, while a capital expenditure increase of 21% has been undertaken without wavering from the fiscal discipline commitment.