Union Finance Minister Nirmala Sitharaman yesterday slammed the opposition while defending the state of economy and said that there won’t be recession ever.
Sitharaman was speaking in the Rajya Sabha during the Short Duration Discussion on the economic situation in India. Adding that the steps being taken by the government are in the interest of the country, she compared the economic data and statistics during the UPA government with the NDA government. “Economy also has very big foundation with sentiments. This house should have confidence and this house shall have the confidence when I give all the data before you,” she said.
Juxtaposing Indian economy numbers during the UPA with the NDA, Sitharaman said that the real GDP growth was 6.4% at the end of UPA 2 in 2014 and it averaged at 7.5% between 2014-2019. She added that the headline inflation had gone from 10.3% in 2013-14 to 4.5% in 2018-19. The core inflation as well as food inflation has come down from 9.4% and 11.2% from UPA 2 to 5.11% and 3.5% respectively in NDA 1.
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Quoting numbers of FDI inflow, she said that the gross inflow in 2014 was USD 189.5 billion which went up to USD 283.9 billion in 2019. The finance minister also added that the foreign exchange reserves have gone up from USD 304.2 billion at end of 2009-14 to USD 412.9 billion at end of 2014-2019.
Adding that the slowdown in growth is owing to the effect of twin balance sheet crisis. Twin balance sheet problem is the stress on balance sheets of banks, for having non-performing assets in their balance sheets which have low chance of revival and on corporates, for having taken loans and their inability to pay the same. Sitharaman assured that if banks have made provisions for NPAs, the assets will be confiscated, auctioned and the money will be paid back to the concerned banks.
Union Finance Minister also proposed a four-point strategy to address the twin balance sheet problem.
- Recognition of problem
- Recapitalisation of the bank
- Resolution of problem
- Reforms
Blaming the UPA for the current crisis in bank, Sitharaman said that in 2009-2014, there were 2.9% NPAs which is why it was low and took time for them to show up and was pegged at 8.4% in 2014-2019. However, the same has come down from Rs 10 lakh crore to Rs 8 lakh crore. On recapitalisation of the banks, she said that Rs 2,50,000 crore were distributed to the public sector banks which helped them lend. Adding that the Insolvency and Bankruptcy Code passed by the government has helped resolving the asset crisis, she said over 2,162 processes were admitted during October 2019.
On slowing down of GDP, Sitharaman said, “I would like to bring to your notice that between 2014-19 GDP accelerated to 7.4% in 2014-15, 8% in 2015-16, 8.2% in 2016-17, 7.2% in 2017-18 and 6.8 in 2018-19.” She further blamed the regressive tax measures like the minimum alternate tax and dividend distribution tax taken during the UPA tenure for the current situation.
Sitharaman also said that 32 step are being taken to revive growth and economy and are being reviewed on a weekly basis and are showing growth. She even assured the house that PM Modi himself is taking personal interest and giving attention to help revive the growth and take it on an upward trajectory.
