05 Jan 2018 13:07 IST

Feisty Jaitley defends handling of economy

Says inflation, fiscal deficit and credit rating have improved since UPA’s time

Under attack from the Opposition on the state of economy, Finance Minister Arun Jaitley reiterated on Thursday that the country’s economic trajectory is on a stable path.

Replying to a debate in the Rajya Sabha, Jaitley said that despite challenges, financial management has improved in the past three years and that most of the problems the economy faced were due to the UPA government’s legacy.

On the criticism that the Centre changed the parameters for calculating GDP, he said the process started when the UPA was in power. On GST, he said the Opposition demands a lower rate outside Parliament, and inside the House they make an issue about the reduction in revenue.

Jaitley said the improved position on ‘ease of doing business’ and credit rating proved that the country is on the correct path.

He said the Indian economy’s growth rate is the world’s highest and credited it to the measures his government had taken in the past three years.

He said the fiscal deficit has been brought to manageable limits in the past three years. FDI has also increased compared to the last three years of the UPA government, the Finance Minister added.

The inflation situation, he said, is improving. “We framed our economic policies looking at the challenges before the country,” Jaitley said.

'Reckless lending'

On the banking system, he said reckless lending without risk management has affected the banks. The efforts are to increase the capacity of the banks, he added.

Agriculture credit has improved and none of the UPA’s social sector schemes were discontinued; in fact, the allocations for them were increased by the NDA government, he added.

Earlier, initiating the debate, senior Congress leader Anand Sharma said that in the past three-and-a-half years, the country witnessed a decline in all the parameters of the economy. Not even one engine of growth is actually running, he said.

Sharma alleged that the fall in international crude prices has not been passed on to consumers.

“There have been huge savings, and windfall gains, to the government, which have not been passed on to consumers. You have been able to manage only because of the gains made from the fall in the international crude prices,” he said.

The former Commerce Minister said credit offtake by non-agricultural sector was the lowest. “It is the lowest not in two decades but in 65 years. Banks have no money to lend; industry has no capacity to take. So, manufacturing is puttering; gross capital formation remains in the negative; credit offtake is not there and not only that, even one-third of the existing industrial capacity in India is unutilised.

“These are the hard facts. Then, how come you are galloping, you are growing and you are the fastest?” Sharma asked.

CPI leader D Raja said that at a time when people are looking for jobs, the Centre is closing avenues for employment. Citing the Defence Ministry’s reported decision to not give stitched uniforms to soldiers, he said that the move will render hundreds of workers in the defence sector’s textile units jobless.

He said there is nothing private in the private sector and that establishments in the sector are running with subsidies given by the government and loans from public sector banks. He urged the Centre to take steps to ensure reservation in the private sector too.

BJP leader Bhupendra Yadav said the Narendra Modi government had led the country from a state of paralysis to a state of transformation. He said the confidence of investors has improved because of the initiatives by the Centre.

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