“Our recovery has been the fastest and most sustained of any economy…” she said, adding that the momentum of recovery will continue in the year ahead. She said the government had focused on capital spending because of its multiplier effect on the economy and to restore growth. “The Indian economy is expected to grow by 9% in the next fiscal year; the United States is expected to grow by 4%,” she said, responding to the budget debate in the Lok Sabha.
On the discrepancy of growth estimates in the economic survey and the budget, she said the survey used advanced estimates from the Central Bureau of Statistics which did not take into account the impact of the third wave of the pandemic. Sitharaman said the government believes it is better to spend taxpayers’ money on capital expenditure, citing a Reserve Bank of India study that each rupee so spent yields ₹2.45 in the first year and 3, ₹14 per second.
The finance minister observed that while the government borrows money for capital spending, it is careful to rationalize revenue spending, which she says will grow by just over 3% in the financial year. 23, which shows a visible deceleration.
‘MGNREGA is demand driven’
Sitharaman hit back at allegations that the government has cut benefits to social security schemes, particularly the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). “MGNREGA is a demand-driven program. As there is demand, through the Supplemental Demand Grants, we give the additional amount required,” Sitharaman added.
She said banks had sanctioned loans worth ₹3.1 lakh crore under the emergency line of credit guarantee scheme for the MSME sector which has been hit by the disruptions due to the pandemic. The scheme has been extended to March 2023. “MSMEs who still wish to avail of it are welcome to use it…the loan amount sanctioned under the ECLGS is ₹3.1 lakh crore and the collateral space is still ₹1.4 lakh crore,” she said in her 100 Minutes reply.
Andhakaal and Amritkaal
Addressing the Congress party, Sitharaman said the term UPA was the “Andhakaal” of India, citing double-digit inflation, mismanagement of foreign direct investment and rampant corruption.
She claimed the government has handled the economic crisis better than the UPA’s handling of the global financial crisis in 2008-09, despite Covid being one of the worst events India has faced so far . She cited data on key macroeconomic indicators after the 2008 financial crisis and the pandemic years to highlight better handling of the pandemic-induced crisis.
“We have managed the economy much better”
“Today, despite the crisis, the reduction in GDP, the consumer price index is well contained, we have managed the economy much better,” said the FM, noting that despite the disruption of the chain d supply inflation in 2020-21 was 6.2%, while in 2008-09 it was 9.1%.
The finance minister enlisted the initiatives and plans of the Narendra Modi government, including Jan Dhan, rural electrification and Gati Shakti, adding, “All these plans pave the way towards Amritkaal.”
Sitharaman pointed to the fact that 44 unicorns – startups valued at $1 billion or more – have been identified in India between 2020 and 2021. “They created wealth. They showcase the talent and innovation of the India,” she said. The government, she said, had removed 25,000 compliances and repealed 1,500 laws to make doing business easier.
BSNL and Umbrella
Finance Minister said BSNL’s revival was due to policies followed by Modi government, while non-cooperative measures followed by UPA led to BSNL’s market share declining to 7.16% vs. 19% in 2015.
Defending the umbrella duty hike, Sitharaman said about 25 million umbrellas were imported from a country and the measure would support the domestic industry.