New Delhi, Aug 1: India does not face any risk of recession or stagnation as its macroeconomic fundamentals are “perfect”, Finance Minister Nirmala Sitharaman asserted in the Lok Sabha on Monday.
In a nearly two-hour-long reply to the debate on price hikes, he said India continues to be the fastest growing economy in the world as reported by global agencies.
Dissatisfied with the response, the opposition led by the Congress staged a walkout.
Seetha Raman said that India is doing better than its peers and “there is no question of India going into recession or stagnating … there is no question of us going into stagnation or technological recession like the US.” “
US GDP fell 0.9% in the second quarter after a 1.6% decline in the first quarter, in what they call an unofficial recession.
He added, “A Bloomberg survey done by economists says there is zero chance of India slipping into recession, so it’s not just me saying that. There is zero chance of India slipping into recession though.” There are several major economies that are in a very dangerous position of falling into recession.
On the country’s macroeconomic fundamentals, the finance minister said the country’s debt-to-GDP ratio is better than many developed countries, including Japan, and GST collections are the second highest since its rollout in July. The highest level has been reached.
GST collection in July rose 28 percent to touch the second highest level of Rs 1.49 lakh crore. GST, introduced in July 2017, touched a record high of Rs 1.68 lakh crore in April 2022.
This is the sixth time that monthly GST collections have crossed the Rs 1.40-lakh crore mark since the introduction of the Goods and Services Tax and the fifth consecutive month since March 2022, he said.
He said the Purchasing Managers’ Index (PMI) touching an eight-month high is an indication that the Indian economy is getting stronger.
He said that gross NPAs of scheduled commercial banks have reached a six-year low of 5.9 percent, adding that the government’s debt-to-GDP ratio has come down to 56.29 percent in FY22. .
Acknowledging that the country is facing inflationary pressures, the finance minister said the government has been able to keep it below 7 percent despite issues like Covid-19 and Omicron.
The minister said that efforts are being made to bring retail inflation below 7 percent.
He further said that after the steps taken by the government, the price of edible oil has improved rapidly.
During the UPA regime, he said, “Retail inflation was over 9 per cent in 22 months and inflation crossed double digits 9 times during the UPA regime… We will bring inflation below 7 per cent. And bringing inflation below 7 percent.”
Responding to repeated opposition criticism that the Modi government has increased GST on essential items, Seetha Raman said it was a unanimous decision of the GST Council comprising state finance ministers and Union finance ministers.
A 5 percent Goods and Services Tax (GST) was levied on pre-packaged curd, cheese, honey, molasses, puffed rice (mori) and other essential food items, effective from July 18.
In addition, 12% GST has been levied on hotel rooms, maps and charts, including atlases, with a tariff of up to Rs 1,000 per day, while 18% GST has been levied on tetra packs and issuance of cheques. Fees charged by banks (in loose or book form) for
The decision was unanimous and there was no disagreement on the rate hike, he said, adding that it was done to eliminate leakages.
Referring to the expensive pencil and the letter written by the six-year-old girl on Maggie, she said that the girl has faith in the Prime Minister and that is why she has written to him.
The Finance Minister said that he has not written to anyone else as he believes that the Prime Minister can provide a solution.
The Finance Minister said that the GST compensation has been paid to the states till May 2022 and only the dues for the month of June remain.
Regarding the issuance of oil bonds worth Rs 1.48 lakh crore by the UPA government, Seetha Raman said, it was fundamentally wrong and the burden of paying interest and principal repayment was shifted to the next generation.
“Today’s taxpayers are paying for the subsidy given to consumers more than a decade ago in the name of oil bonds. And they will continue to pay for the next five years as the redemption of the bonds continues until 2026,” he said. .
Regarding foreign exchange reserves, he said that India has sufficient reserves and the economic fundamentals are sound.
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