The lagged effect of the twin balance sheet crisis faced by banks led to a fall in GDP in the last two financial years, finance minister Nirmala Sitharaman said. The economy may have currently slowed down, there is no recession, Nirmala Sitharaman replied to a discussion on the economic situation in the country in Rajya Sabha. “Economic growth may have slowed but there is no recession, there can be no recession,” she said. The government is taking every step towards the development of the economy as it has to be given a lot of support, she added. Presenting numbers between five years under the Congress-led UPA-II regime from 2009 to 2014 and BJP’s first term from 2014 to 2019, she said that the inflation was lower and growth higher under the Modi government.
FDI inflows in 2009-14 were $189.5 billion and the same was $283.9 billion under BJP rule in the following five years, she said, adding foreign exchange reserves rose to $412.6 billion under BJP from $304.2 billion in UPA-II. Spelling out the 4R agenda, Nirmala Sitharaman said that the government undertook recognition, recapitalization, resolution and reform measures to prop up the economy. Insolvency and Bankruptcy Code (IBC) is yielding results and Rs 70,000 crore capital infusion in banks is seeing results in rise in liquidity, she added.
Nirmala Sitharaman said that the country’s real GDP growth was at 6.4 per cent at the end of 2009-2014. Between 2014-2019, it was at 7.5 per cent. “Around Rs 2.5 crores was distributed through PSBs. How was that possible without liquidity?,” Nirmala Sitharaman also said. “This was possible because we have recapitalised banks,” she added. Congress later staged the walk out of Rajya Sabha over reply by the finance minister on the state of the economy.
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