NEW DELHI :
Finance minister Nirmala Sitharaman on Tuesday defended the Narendra Modi-led ggovernment’s efforts to steer the economy out of a sharp slowdown and questioned the track record of the previous Congress-led United Progressive Alliance (UPA), especially on the gap between receipts and spending.
In her reply to a Lok Sabha debate on Union Budget for FY21, Sitharaman sought to answer all the criticism made by the Opposition parties in Parliament and elaborated on the steps taken to boost investment, consumption and exports and on the public spending made in certain key sectors.
Responding to the criticism by Congress party leader and former finance minister P Chidambaram, Sitharaman said when Manmohan Singh was the prime minister, the gap between government’s receipts and spending as a share of GDP was greater than it is now. Chidambaram on Monday had said that the economy was not yet in ICU, but still needs to be wheeled into an ICU for treatment by competent doctors.
The fiscal deficit during 2008-09 was 6.1% and it was 6.6% in 2009-10, Sitharaman said, adding “Some hard truths will have to be heard (about the period) when the economy was managed by very competent doctors." Sitharaman was defending a 0.5 percentage point upward revision in fiscal deficit for FY20 to 3.8% in her budget presented earlier this month.
The budget debate has highlighted the decline in consumption and the absence of big investments, the big challenge that has gripped the first year of Modi government’s second term in office after securing a crushing victory last May. These trends could come in the way of the government’s goal of scaling up the size of the economy to $5 trillion by 2024-25. The economic slowdown had prompted Prime Minister Modi last year to walk away from a mega regional trade deal, the proposed Regional Comprehensive Economic Partnership (RCEP), after having tried hard for securing more favourable terms to protect local industry.