Opposition flags inflation, job loss; FM Sitharaman says no recession or stagflation

Replying to a dialogue on value rise in Lok Sabha, Sitharaman hit out on the Opposition for evaluating the nation’s financial circumstances with that of neighbouring nations like Sri Lanka, and mentioned India is in a much better place as its “macroeconomic fundamentals are perfect”.

“If we talk about India’s economy, then we are the fastest growing despite all the challenges — global challenges and domestic challenges,” she mentioned.

Sitharaman additionally quoted former RBI governor Raghuram Rajan and mentioned that the Reserve Bank of India has performed a “very good job in increasing the foreign exchange reserves in India, insulating (it) from problems being faced by neighbouring countries, such as Pakistan and Sri Lanka”.

The Opposition, nonetheless, took on the Government, blaming it for widening inequality with rising costs and failing to supply jobs.

The Congress accused the Government of getting failed within the fundamentals of financial system. The TMC mentioned the Government’s insurance policies had left folks with out cash to even purchase LPG cylinders. Not happy with Sitharaman’s reply, Congress and DMK MPs walked out of the House.

Earlier, responding to Congress chief Adhir Ranjan Chowdhury, who sought to know whether or not India is heading in direction of stagflation, Sitharaman mentioned, “There is no question of India getting into recession or stagflation.”

Observing that banks and their well being are equally vital for trying on the financial system, Sitharaman mentioned, “In India, the gross Non-Performing Assets of scheduled commercial banks is on a six-year low at 5.9 per cent in FY-22. So, in China 4,000 banks are on the verge of going bankrupt and our NPAs are improving.”

She mentioned that the debt to GDP ratio of many nations, together with the US, is in triple digits whereas it’s 56.29 per cent in India. “India is in a far better position than its peers…Indian economy showing very positive signs,” Sitharaman mentioned.

“First of all, as Indians we should appreciate that our people have gone through this pandemic… But in spite of that, because of the various steps taken by the Government and also by the Reserve Bank of India, we are much better than most countries,” she mentioned.

“I recognise that everybody — Members of Parliament and state governments — all have played their role, otherwise India today will not be where it is compared to the rest of the world. So, I fully credit the people of India… we are recognised as the fastest growing economy and this is not my assessment,” she mentioned.

At the outset of her lengthy reply that lasted for an hour 40 minutes, with frequent disruptions by the Opposition, Sitharaman mentioned, “I find it was more a discussion on political angles of price rise rather than data-driven concerns about prices. Therefore, I am trying to make my reply a little political.”

Comparing inflation figures through the NDA rule with that through the Congress-led UPA authorities, Sitharaman mentioned, “We have held the inflation well within 7 or below. Retail inflation was over 9 per cent for 22 months during the UPA… Inflation was in double digit nine times.” In 2012-13, the Consumer Price Index was 10.05 per cent whereas it was 6 per cent in 2020-21, she mentioned.

Sitharaman additionally hit out on the Congress for issuing oil bonds throughout its rule. In precept, the choice to challenge oil bonds was flawed, she mentioned, including that the tradition of freebies needs to be ended.

Observing that duties on crude palm oil have been diminished from 35.75 per cent to eight.5 per cent and now to five.5 per cent, Sitharaman mentioned, the Government has drastically introduced down the obligation in order that edible oil costs can come down.

Hitting out on the Opposition for evaluating India with neighbouring Bangladesh and Sri Lanka, Sitharaman mentioned, “India is better than Sri Lanka and Bangladesh… Today, Bangladesh is demanding a loan of $4.5 billion from the IMF. Sri Lanka is demanding $3.5 billion. Pakistan is demanding $7 billion. India’s condition is not like that… India’s macroeconomic fundamentals are perfect… Compare with the US. What are Bangladesh and Sri Lanka.”

Responding to the Opposition demand for a rollback of GST on meals gadgets like milk, curd and rice, Sitharaman mentioned, “This issue was discussed in the GST Council in full detail. All the state ministers were present. There was no voting and the decision was taken by a consensus.”

The Finance Minister clarified that GST has been levied solely on pre-packaged and labelled gadgets, and never on gadgets being bought free.

She mentioned the choice to impose GST on these things was taken at three ranges, Fitment committee, Group of Ministers and GST Council, and identified that representatives from Opposition-ruled states participated within the course of.

None of them expressed dissent, she mentioned, including that the GST has been levied solely on branded meals gadgets to curb leakage in income.

She additionally highlighted how there was VAT on meals merchandise like pulses in varied states together with Punjab, Tamil Nadu, Telangana, Andhra Pradesh and Jammu and Kashmir.

“To those who talk about GST, I want to tell them with folded hands that the GST Council is a constitutional body in which all the states and the Centre sit together and in which decisions are not taken by (Prime Minister Narendra) Modiji. The decisions are taken by finance ministers of all the states. They should tell the truth in their states. But they don’t do so,” Sitharaman mentioned.

The Union Finance Minister additionally clarified that there was no GST on burial and crematorium providers. On the GST compensation challenge, she mentioned that just one month’s compensation (for June 2022) is pending for states.

In his speech, Congress chief Chowdhury accused the Government of serving to corporates. “The Modi government is only for two people,” he mentioned, including that “two-three companies” are engaged in “loot” whereas “the poor are forced to live in darkness”.

In response, Sitharaman identified that the Congress authorities in Rajasthan has allotted 2,397 hectares of land to an Adani firm. She mentioned that the Rajasthan authorities had signed an MoU with an Adani agency only a day after Congress chief Rahul Gandhi had accused the Government of favouring Adani and Ambani.