Finance Minister Nirmala Sitharaman on Wednesday launched a spirited defence of her handling of the economy, comparing macroeconomic indicators with past Congress rules and said the growth may have slowed down but the economy will never slip into recession.
Replying to a short-duration discussion on the state of the economy in the Rajya Sabha, she said steps taken by the government post her maiden budget have started bearing fruits and some sectors such as automobiles have shown signs of recovery.
Allaying concerns over revenue position of the government, she said direct tax and GST collections have both seen an increase in the first seven months of the current fiscal when compared to the same period of the last year.
The Congress, the TMC and the Left parties, however, staged a walkout of the House saying she was reading out her budget speech rather than addressing issues facing the economy.
“Every step being taken is in the interest of the country… looking at the economy with discerning view, you see that the growth may have come down, but its not a recession yet or it won’t be recession ever,” she said.
She then went on to compare GDP growth during the Narendra Modi-led BJP government since 2014 and that witnessed in the previous five years under the UPA-II regime, saying inflation was below the targeted range, economic expansion was much better and so were other macroeconomic indicators.
India’s growth outlook has weakened sharply this year, with a crunch that started with the non-banking finance institutions spreading to retail businesses, car-makers, home sales and heavy industries.
The Indian economy expanded by 5 per cent in April-June, its slowest annual pace since 2013 and the projections are that it may have slowed down further in the second quarter, making six consecutive quarters of slowing growth, a first since 2012.
This despite a recent series of fiscal stimulus, including a reduction in corporate tax rates.
Sitharaman blamed the fall in GDP growth in the last two financial years to the lagged effect of twin balance sheet crisis of stress on banks due to non-performing assets (NPAs) or bad loans on the one hand and heavily indebted corporates on the other, resulting from the UPA regime lending.
Rejecting criticism that her maiden budget on July 5 had failed to address concerns of a slowing economy and so had to resort to announcing measures within a month of the passing of the budget by Parliament, she said the Economic Survey and she had recognised the need for recapitalisation of bank and reforms in her budget speech.