No question of country getting into stagflation or recession, says Finance Minister of India

A file photo of RBI building.

‘kitchens will soon see a lockdown if GoI does not take corrective measures’

New Delhi: India is facing no risk of recession or stagflation as macroeconomic fundamentals of the economy are strong, Finance Minister of India Nirmala Sitharaman said on Monday.

Replying to a debate on price rise in the Lok Sabha, she said the GST collection and Purchasing Managers’ Index (PMI) are indicating that the Indian economy is getting more robust, news agency PTI reported.

The GST collection rose 28% to touch the second-highest level of Rs 1.49 trillion in July. GST, introduced in July 2017, touched a record high of Rs 1.68 trillion in April 2022.

This is the sixth time that the monthly GST collection crossed the Rs 1.4 trillion-mark since the inception of Goods and Services Tax and the fifth month at a stretch since March 2022, she said, as per the news report.

She also said that the banking sector in the country is also healthy compared to other countries.

Gross NPAs of scheduled commercial banks have reached a six-year low of 5.9%, she said, adding that government debt to GDP ratio has come down to 56.29% in FY22.

Efforts are being made to bring down retail inflation below 7%, the GoI minister said.

Prices of edible oils have corrected sharply following steps taken by the government, she added.

Not happy with the reply of the Finance Minister on the price rise, Congress members walked out of the House.

Opposition members in Lok Sabha, earlier on Monday, blamed the BJP-led GoI’s policies for the price rise and accused it of ignoring the plight of common people, saying kitchens will soon “see a lockdown” if the GoI does not take corrective measures.

Initiating a debate on the issue of the price rise, Congress member Manish Tewari said the government’s decisions have hit hard 25 crore households in the country and widened the divide between the rich and the poor.

He alleged that savings, investment, production, consumption and employment, the five pillars of the economy, have been blown away due to the wrong policies of the Union government.

“During the UPA regime, 27 crore people were brought above the poverty line. Then it was learned from a report, which was made public in 2021, that as many as 23 crore people are once again below the poverty line,” he said.

The situations arising out of the COVID pandemic would be a factor leading to the current economic scenario but the country’s economy had already started weakening with the government’s decision to demonetize high-value currency notes on November 8, 2016, he charged, as per PTI.

After the note ban, the government brought in GST implementation which hit at least 230,000 small industries. “This note ban and GST not just impacted medium and small scale industries but employment also,” he said.

Quoting Trinamool Congress member Kakoli Ghosh Dastidar, the news agency report alleged that the GoI was not taking any step to tackle the price rise and said the frequent rise in prices of LPG has made it difficult for poor people to cook food.

“Does the government want people to eat vegetables raw?” Dastidar was quoted as saying as she raised the brinjal she had brought with her and took a bite from it, leaving the members visibly amused.


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