Oppn paints bleak picture of economy, FM says no recession yet

Coming under attack from the opposition parties in Rajya Sabha over slowdown and job losses, Union Finance Minister Nirmala Sitharaman on Wednesday compared the macro-economic data of the NDA-I government with that of UPA-II to drive home the point that all was well with the economy.

Replying to members on the short duration discussion in the Upper House, she said that India's real GDP growth was at 6.4 per cent at the end of UPA-II (2009-2014) while it was 7.5 per cent, between 2014-2019, in the NDA government.

"I have reason to do it. You must permit me and you may kindly hear," the Finance Minister told opposition.

Soon after this, most of the opposition members walked out from the House while the Minister continued her response to the various issues highlighted by various MPs. As many as 23 members spoke on the economic situation in the country.

On growth concerns with many opposition members blaming the government decisions of demonetisation and "hasty" GST implementation for the slowing GDP, Sitharaman said that growth may have come down but it is not recession yet.

The Minister said that the lagged effect of twin balance sheet crisis faced by banks had caused the GDP slowdown in the last two fiscals but listed out several measures taken by the government to prop up the economy. She said that she had taken 32 major steps to boost the economy and they had been bearing fruit.

Sitharaman rejected opposition member' contention that demonetisation had triggered the slowdown, saying it had helped cull out black money and formalise the economy. The Minister said that tax buoyancy has increased over the last few years and tax base has also increased.

She also noted the positive impact of digitisation, saying many countries were keen to replicate the same.

On the revenue position, she said that revenue receipts had increased in the first six months of the current fiscal. Further, a total of Rs 3.26 lakh crore out of targeted Rs 6.63 lakh crore in the budget had been collected in the first 7 months of FY20.

Starting the short duration discussion, senior Congress leader Anand Sharma raised concerns around government finances, saying the fiscal deficit could have reached alarming levels, factoring in all the refunds due from the government. The former Union Minister also said that investment had fallen to record low and people's trust in the banking system had been going down.

He took a swipe at the government, saying it was in a state of denial.

"We are staring at an alarming fiscal deficit," Sharma said.

He said that the government should have given money in the hands of the poor by raising the employment days in a year to 150 and increasing the daily wage to Rs 400 under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) instead of extending tax bonanza to corporates.

Blaming demonetisation and "hasty" GST implementation for the state of the economy, Congress and other opposition leaders made a scathing attack on the government. They blamed the "wrong" policies of the Narendra Modi government for the slump in economic growth and also raised questions around PSU sell-off plan.

Congress leader Jairam Ramesh also disapproved government move to sell PSUs, especially those making profits and Navratna firms.

"This is not planned privatisation, it is panic privatisation," Ramesh said.

Trinamool Congress member Derek O'Brien raised the issue of trust deficit suggesting the government scored low on trust with various stakeholders of the economy. He urged Prime Minister Narendra Modi to take self-advice to improve the state of the economy.

"Economy is in trouble. Youth want jobs, devote more time to economics. Please focus on job at hand. My request to Prime Minister, through you, is to take heed of this advice given to all of us by the Chief Minister of Gujarat in November 2013. Self-advice is always best advice," he said.

NCP leader Majeed Memon pointed out at massive slowdown in automobile and real estate sector. "We are at crossroads with regard to the current Indian government's ability to lead the nation towards a progressive economic future," he said.

Terming the government's privatization overdrive, AAP leader Sanjay Singh said it was unfortunate that profit-making PSUs are being sold. He raised questions over the state of banks in the country and mentioned the failure of PMC Bank to highlight the state of the economy.

DMK leader T.K.S. Elangovan said that the economy is not the priority of the government.

"Their priority is to change this country into another country, not economically," he said.

"Rosy pictures are given to public and real pictures are hidden," the DMK leader added referring to employment data held by the government.

Elangovan also expressed reservations over government move to change the terms of reference of the Fifteenth Finance Commission. He stated that why states should bear the cost of defence when it is in Central list.

( With inputs from IANS )