Rating agencies must take note of the country’s macroeconomic strength, she says
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Reforms carried out “despite the odds” have transformed India’s economy from a “fragile” state to one of the largest in the world, Finance Minister Nirmala Sitharaman told TV news channels on Friday a day after presenting the Interim Budget,
The government is confident that it will manage inflation and “keep the robustness of growth”, she told CNBC TV18, commenting on job creation, the rural economy and welfare measures.
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“But periodically it’s our business also to bring it to their [rating agencies] notice that economies, particularly emerging market economies like India, despite the odds, we are doing a lot of reforms, systemic reforms, which actually you are seeing is bearing the results now,” the finance minister said.
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Sitharaman yesterday resisted the temptation of spending trillions of rupees on schemes for the poor in its last budget before elections and instead stuck to the path of fiscal consolidation to attract investors. Tax policies were left unchanged in the Budget, major subsidies on food, fertiliser, and fuel were 8 per cent lower and an allocation for the rural employment scheme MGNREGA was left unchanged.
Sitharaman told CNBC TV18 that data collection on jobs being created must improve. “College recruitments, IIM-like campuses are important but jobs created in middle and lower order are not being counted at all,” she said, referring to the Indian Institutes of Management. “We need to bring in data on India’s employment both in formal and informal areas to see it on a wider base”.
“I am not sure I will be able to describe what is happening in the rural economy. Let us recognise there is a lot of shift in employment, let us recognise migration is now looking at redefining itself,” she said.
India’s economy has been transformed from a “fragile” state to one of the largest in the world, and this is the time for the government to commission a white paper, Sitharaman told NDTV news channel in a separate interview.
“In 2014, we took over an economy in such a bad state. There was economic paralysis and corruption… we needed a white paper then. But at the time the Prime Minister put the people first.”
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“If we had brought a white paper at that time, nobody would have invested in the country looking at the fragile state of the economy,” she explained. “We took the Indian economy from ‘fragile’ to the top. This is why we are bringing in a white paper now. This is the right time.”
As India heads for Lok Sabha elections later this year, Sitharaman said the government has the confidence of the people. “When there is word of mouth… when the people have confidence that a government works to get them the schemes… when all the schemes have reached the people… then there is confidence,” the Finance Minister told NDTV.
“People blessed us the first time (and) the second time… it will happen this time too,” she said, referring to the BJP’s victories in the 2014 and 2019 general elections.
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