No chance of India getting hit by recession: Finance minister Sitharaman
Indian finance minister Nirmala Sitharaman speaks in the Indian parliament in New Delhi on Monday, August 1, 2022. (ANI Photo/Sansad TV)
HIGHLIGHTING India’s robust economic health despite the Covid-19 pandemic and current geo-political situation, Indian finance minister Nirmala Sitharaman on Monday (1) said there was no question of India getting into stagflation or recession like some major economies of the world.
In her reply to the debate on price rise at the Lok Sabha of the Lower House of the Indian parliament, Sitharaman said, “We have never seen a pandemic of this kind. All of us were trying to make sure that people in our constituencies are given extra help. I recognise that everybody — MPs and state governments have played their role. Otherwise, India would not be where it is compared to the rest of the world.”
“So, I fully credit the people of India for this. Even against adversity, we are able to stand up and be recognised as the fastest-growing economy,” she said.
The minister emphasised that due to the measures taken by the government, India is in a much better position than most countries.
“Repeatedly in the assessment of global agencies, India remains the fastest-growing economy in the assessment of global agencies.
“This House, irrespective of the party, should feel proud of the country and its people. State governments have helped,” she said.
Referring to a survey, Sitharaman said there is zero possibility of India getting into recession.
Sitharaman said the Gross Domestic Product (GDP) of the US fell 0.9 per cent in the second quarter following a 1.6 per cent decline in the first quarter. “They start it calling an unofficial recession. There is no question of India getting into recession or stagflation,” the finance minister said.
“Pandemic, second wave, Omicron, Russia-Ukraine (war), even today largest supply components in China are under lockdown. In spite of that, we have held inflation well within seven per cent or below. That has to be recognised,” she told Lok Sabha.
She further said, “4,000 banks in China are reported to be going bankrupt. In India, the gross NPAs (Non-Performing Assets) of scheduled commercial banks is at a five-year low of 5.9 per cent in 2022. So our NPAs are improving. The government debt to GDP Ratio of many countries is in triple digits including Japan, Greece, Bhutan, Singapore, the US, Portugal, Spain, France, Sri Lanka and Canada. But the central government very consciously controlled its debt and it is at 56.29 per cent of the GDP at the end of 2021-22 compared to the 59.9 per cent revised estimate that year.”
According to IMF (International Monetary Fund) data, Sitharaman said, the general debt to GDP ratio is 86.9 per cent, including the central government and the states.
In July 2022, the minister said the country has garnered the second-highest level ever since the introduction of the GST (Goods and Services Tax) which is Rs 1.49 lakh crore (£15.37 billion).
“In April 2022, it was Rs 1.67 lakh crore (£17.22 billion) which was the highest we reached. This is the fifth consecutive month that collections have been above Rs 1.4 lakh crore (£14.44 billion),” she said.
Quoting former Reserve Bank of India governor Raghuram Rajan, Sitharaman said, “On Saturday (30), Raghuram Rajan said that ‘RBI has done a good job in increasing foreign exchange reserve in India, insulating India from problems being faced by neighbouring countries such as Pakistan and Sri Lanka.
“Differentiating India from its vulnerable neighbours, Raghuram Rajan further added that ‘New Delhi is less indebted’, calling it a good sign,” she said.
Amid Sitharaman’s reply to the debate on price rise, members of the opposition Indian National Congress walked out from Lok Sabha.