Union Finance Minister Nirmala Sitharaman on Thursday rebutted former Prime Minister Manmohan Singh’s statement that the Centre was “obsessed with” trying to blame its opponents instead of looking for solutions to revive the economy, PTI reported. She told Indian media in Washington DC that she needed to discuss the UPA regime to provide context for the current situation.
“I respect Dr Manmohan Singh for telling me not to do the blame game,” Sitharaman said. “But recalling when and what went wrong during a certain period is absolutely necessary to put it in context, now that I’m being charged that there’s no narrative at all about the economy.”
“I don’t need to put the blame,” she added. “It is more than apparent as to when the wrongdoings happened in banks and which is the government which is spending time to clear the clog from public sector banks and which is the government which is pursuing all those who have taken money during the UPA government and who’ve gone out to the country out of fear that action is being taken now under this government.”
She acknowledged that there were questions about the alleged absence of a cohesive narrative on the economy. “If there is a charge against us that we have not given a cohesive narrative about the economy, I’m sorry,” she said, adding that she suspected that the government’s narrative about economy in general has itself probably not reached them.
She added that the fact that the Modi government doesn’t support crony capitalism was a part of the narrative.“I would want to mix my narrative together with stating what went wrong earlier. I wished the Congress had the courage of conviction to hear it,” Sitharaman said. “We never committed mistakes and corruption. We’ve not given any loans to cronies. We’ve never supported any wrongdoing.”
Former Prime Minister Manmohan Singh had earlier on Thursday said that before one can “fix the economy, one needs a correct diagnosis of its ailments and their causes”. He had also accused the government of only trying to fix blame on opponents. Singh’s remarks came a day after Sitharaman said the “worst phase” of the Indian public sector banks was seen during Singh’s time as prime minister and Raghuram Rajan’s tenure as the Reserve Bank of India governor.
Sitharaman had said that during Rajan’s time as RBI governor, loans were given on the basis of “phone calls from crony leaders”. The finance minister was responding to Rajan’s remark that India’s fiscal deficit concealed a lot and could push the country’s economy to a “worrisome situation”.
The Indian economy is currently battling a slowdown and government data showed that the country’s industrial output contracted 1.1% in August compared to the same month last year. The economic growth rate slipped to a six-year low of 5% in the April-June quarter. This was the fourth straight quarter of slowdown.
The International Monetary Fund on Tuesday revised India’s projected growth rate to 6.1% for the 2019-’20 financial year. In July, it had revised the country’s growth forecast from 7.3% to 7%.
But economy growing fast, FM adds
Sitharaman added that the Indian economy was “still growing as the fastest” though the International Monetary Fund projected a reduced growth rate, PTI reported. She is currently in Washington to attend an annual meeting of the IMF and the World Bank.
“I wish it can be more,” she said. “I wish it can grow faster. I’ll make every effort to make it grow faster. But the fact remains that it is still growing faster...It’s one of the fastest growing economies too. But that’s not going to make me complacent.”
“It’s not eight. It’s not seven. It’s come down to six and so on. Yes, all these are very important. But I don’t want to underestimate the potential that India is showing even in this adverse circumstance,” Sitharaman said.
The International Monetary Fund on Thursday said India has worked on the fundamental aspects of its economy but there were problems, such as long-term drivers of growth, that need to be focused on. “In the [Indian] financial sector, especially non-banking institutions, there are steps taken now to consolidate banks,” IMF Managing Director Kristalina Georgieva said. “They ought to help resolve some of these issues. In India, what is critically important is to continue with addressing the long-term drivers of growth. Investment in human capital in India is a top priority.”
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