Economy will rebound in times ahead, claims Union Minister of State for Finance.
Taking on former Union Finance Minister P. Chidambaram for his criticism of the state of the economy, Minister of State for Finance Anurag Thakur said that it was resilient and would rebound in the times ahead. He cited international agencies’ projections of India as the only ‘major economy’ expected to record a double digit growth in 2021-22.
“Is the Indian economy an island in isolation; have other major economies not faced a GDP contraction? Are you not aware that France, Germany, Italy and the U.K. contracted by 8.2%, 4.9%, 8.9% and 9.9% respectively. Canada, Russia, South Africa and the U.S. too have seen contraction in their GDP in the past year,” he stated, referring to the 7.3% contraction in GDP in 2020-21.
“Consistent reforms have ensured strong fundamentals through these difficult times… [so] India had a swift rebound from a contraction of 24.4% in the 1st quarter of FY 2020-21 to a growth of 1.6% in the 4th quarter.” India had been resilient despite the disruptions in the globalised world, he noted.
“I am not surprised that the Former Finance Minister chose to ignore hard data and instead went ahead with ‘whataboutery’ – the Congress leadership has embodied this clueless approach over the years.” Facts belied Mr. Chidambaram’s advice on initiating cash transfers to people to help cope with the second wave, he said.
Mr. Thakur urged Mr. Chidambaram to ‘shift gears from his gloom and doomsday prediction’. It was evident that the ‘lockdown saved lives and gradual unlocking allowed green shoots’ in the economy, as reflected in the record GST collections, growth in auto sales, steel, cement and international air cargo, he pointed out.
“The Index of Eight Core Industries grew 11.4% in March 2021 and a staggering 56.1% in April 2021… Steel and cement sectors grew 27.3% and 32.7%, respectively, in March 2021. Important to note, since this growth is over and above the pre-lockdown period of March 2020. The two sectors grew 400% & 549% in April 2021,” he said.
Mr. Thakur told Mr. Chidambaram, “While you doubt the resilience of Indian entrepreneurs, small businesses, traders and MSMEs to revive themselves; various international agencies project India to grow by 12.5% in FY 2021-22 making us the only major economy to have a projected double digit growth.”
‘Cash Transfers already happening’
On Mr. Chidambaram’s advice to initiate cash transfers to help the poor cope with the second wave of the pandemic, he cited the higher procurement of wheat, pulses and rice during the NDA (National Democratic Alliance) tenure. He alleged that the Congress had misled farmers on agricultural laws. “Today, farmers are happy and have differentiated the truth from the false narrative of Congress leaders,” he observed.
“…The 8th instalment of PMKisan via DBTs provided ₹19,000 crore directly to farmers. Does this not give the farmer “cash in hand?”, he said. He asked Mr. Chidambaram how many bank accounts were opened for the poor under the UPA (United Progressive Alliance) rule.
“DBTs [Direct Benefit Transfers] were given under the NSAP [National Social Assistance Programme] to widows, divyangs and senior citizens; under the BoCW (Building and Other Construction Workers) Act to building and construction workers; front-loaded PM-KISAN for farmers and 24% contribution made to EPFO [Employees’ Provident Fund Organisation] and Ujjwala. The total transfers exceed ₹68,000 crore. Is that not ‘cash in hand’” he asked. MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) allocations and wages have also been raised to provide cash to workers.
Mr. Thakur argued that the UPA government gave out bad loans during Mr. Chidambaram’s tenure in the Finance Ministry. The government had provided a ₹3 lakh crore emergency credit line guarantee scheme for industry to sustain.
“Over ₹ 2.65 lakh crore has been sanctioned by public and private sector banks and NBFCs [Non-Banking Financial Company] to over 92 lakh accounts. Does this not provide ‘cash’ flow for businesses?” he concluded.
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