Finance Minister Nirmala Sitharaman on Tuesday said the economy is not in trouble and green shoots are visible with the country moving towards a USD 5 trillion economy.
Listing initiatives taken by the government, she said, increasing Foreign Direct Investment (FDI), rise in factory output and over Rs 1 lakh crore GST collection in the past three months are indications of green shoots in the economy.
“There are seven important indicators which show that there are green shoots in the economy…economy is not in trouble,” she said while replying to a debate on the Union Budget in Lok Sabha.
Referring to visible indicators of green shoots, the Finance Minister said the forex reserve is at an all time high and the stock market is upbeat.
“Global sentiment is in favour of India. Foreign investors continue to show confidence in India and that is why the country has attracted a net FDI of USD 24.4 billion in April-November 2019-20 as against USD 21.2 billion in the same period the previous year,” she said.
Net Foreign Portfolio Investment (FPI) in April-November 2019-20 was positive at USD 12.6 billion as against USD 8.7 billion in the same period last fiscal.
She further said the gross GST (Goods and Services Tax) revenue collected in January 2020 grew at 12 per cent while in November 2019, it was 6 per cent.
“So there is a steady growth and therefore negative growth, which it showed in September and October, has been corrected and we are on a positive growth trajectory and this will obviously bring in greater and newer investments to the economy and it will also reduce the business cost,” she added.
There are seven green shoots based on which the economy now very clearly moving forward, she added.
The Finance Minister said the government’s focus is on four engines of growth which include private investment, private consumption, public investment and exports.
With regard to public investment, she said, the government in December announced a National Infrastructure Pipeline.
It envisages investment of Rs 103 lakh crore for infrastructure development across the country in the next four years (till 2024-25), she said.
To boost consumption, the government has increased the Minimum Support Price of all mandated Rabi and Kharif crops for 2019-20.
Finance Minister replied to former minister P Chidambaram for his ‘incompetent doctors’ attending to economy remark, saying there was nothing to learn from the people who gave the mountain of NPAs along with twin balance sheet crisis.
Replying to the debate on her Budget for 2020-21 in Rajya Sabha, she said FDI “ran out of the country in 2012-13″ under “competent doctors” overseeing the economy.
She said defence of India was paralysed and did not have equipment under the UPA.
“We are certainly predisposed about not repeating mistakes of UPA”, she added.
She went on to list the twin balance sheet crisis faced by the banks and the mounting NPA and fleeing defaulters.
Also, free trade agreements (FTAs) entered into by the UPA are hurting the country, she said.
The fiscal deficit was higher “when the economy was managed by competent doctors,” she quipped.
Chidambaram on Monday said in the Rajya Sabha that the “economy was perilously close to collapse and was being attended by incompetent doctors.”
Sitharaman in Budget raised fiscal deficit target to 3.8 per cent of the GDP from 3.3 per cent pegged earlier for 2019 -20 due to revenue shortage.
The government has used ‘escape clause’ under the Fiscal Responsibility and Budget Management (FRBM) Act which provides it leeway for relaxation of fiscal deficit roadmap during the time of stress.
Replying to the opposition charge of the government overshooting fiscal deficit target prescribed in Fiscal Responsibility and Budget Management (FRBM) Act, she said the Narendra Modi government has always respected FRBM Act every year and kept the discipline of FRBM Act.
Referring to various initiatives to boost consumption, she said the government has increased Minimum Support Price, introduced a pension scheme for traders, lowered GST rates abolished Dividend Distribution Tax and corporate tax.