FM says Modi government kept inflation under control

The Finance Minister, in response to the budget discussion in the Lok Sabha, said that in 2020-21 there was a contraction of 6.6% in GDP during the pandemic, causing losses. 9.57 lakh crore for the economy was much faster than 2.12 lakh crore in GDP growth that was lost in the global financial crises of 2008-09, yet the government was able to keep consumer price inflation (CPI) within 6.2%, while the CPI ballooned to 9.1 during the global financial crisis. % Was.

“It is showing that we manage the economy better now than in a small crisis of the time when the contraction was only 2.12 lakh crore,” Sitaraman said. He added that the government is taking additional action to keep consumer inflation under check by importing more edible oils, lifting restrictions on import of pulses.

Hitting out at the opposition, Sitharaman highlighted several macro-economic parameters such as record FDI inflows, positive current account balance and high foreign exchange reserves, which were managed optimally despite the pandemic, which has helped the country achieve a sustained economic recovery. placed on the path.

“Be it a developed economy or an emerging one, the decline in growth was much faster for us than these economies, but the pace of our recovery this year and in the years to come is just as fast. We are recovering at the fastest pace and this is a continuous improvement,” Sitharaman said.

Sitharaman further criticized the UPA, saying state-owned carriers BSNL and MTNL were pushed to the brink during its rule but now they have been revived with a recovery package introduced by the government.

“we are given 24,000 crores for 4G which is already 10 years late, which should have been given in their time… 69,000 crore financial assistance has been given,” Sitharaman said.

Sitharaman on Thursday defended the Union Budget for FY13, saying the government has reduced the revenue deficit so that funds are better suited to create productive assets in the form of capital expenditure and at the same time take advantage of its multiplier effect on the economy.

The Reserve Bank of India (RBI) estimates that if Re 1 is spent on revenue expenditure without creating an asset, its multiplier effect will be less than one, while in the case of infrastructure, the multiplier effect will be 2.45 in the year of expenditure. And in the subsequent year, it will be 3.14, the minister explained in reply to the budget discussion in the Lok Sabha.

“Hence, we thought that public taxpayers money being spent on building assets, gives better returns and hence we chose to spend on building infrastructure,” the minister said.

Sitharaman questioned the opposition Congress party over its handling of the economic impact of the 2008-09 global economic crisis, especially inflation following a stimulus package. Earlier this week, Shashi Tharoor of the Congress party said the budget had betrayed the hopes and aspirations of the people, pointing to “unprecedented levels of unemployment” in the country. Congress party members walk out at the end of Sitharaman’s reply to the budget discussion.

Sitharaman highlighted the steps taken by the Modi administration to address the liquidity crisis faced by micro, small and medium enterprises. Sitharaman said the government listened to MSMEs, and extended some support measures, including collateral-free automatic loans.

The Minister also referred to the Pradhan Mantri Mudra Yojana, a loan scheme for MSMEs launched in 2015, saying that 32.11 crore loans have been given with the sanctioned amount. 17 trillion. “This has created an additional 1.2 crore jobs between 2015 and 2018,” Sitharaman said.