Monday, August 1, 2022

There is no possibility of recession, inflation will also be under control! ; Union Finance Minister Nirmala Sitharaman's optimism

New Delhi : Although the economies of developed countries like the US are going into recession, there will be no recession in India and the economic growth will not slow down due to inflation. On the contrary, inflation will be kept under control, claimed Union Finance Minister Nirmala Sitharaman while replying to the debate on inflation in the Lok Sabha on Monday.

The MPs of the opposition parties held the central government on the edge on Monday on various issues like fuel price hike, fuel cess, food grain inflation. But, the discussion on inflation was not based on facts, but only political. Sitharaman said that the opposition’s allegations are based on wrong information. On this, angry Congress members walked out of the Lok Sabha.

Talking about inflation, without comparing the rate of inflation during the Congress government, it will not be understood whether the inflation was kept under control during the Modi government or not, Sitharaman said that to reduce the price of edible oil, the import tax on palm oil was reduced from 35.5 percent to 5.5 percent. Import duty on soybean, sunflower oil has been reduced from 38.5 to 5.5 percent. Controls on import of edible oils have also been removed, now edible oil can be imported in any quantity. Due to this, the prices of edible oils have started to decrease. The 30 percent import duty on pulses like lentils has also been reduced to zero. Import duties on steel etc. have also been reduced. Therefore, a conscious effort is being made to control inflation, said Sitharaman

Retail inflation was 10.5 per cent in 2012-13 under the Congress government, but now under the Modi government it has been brought under control to 6 per cent. Food inflation was 12.34 percent in 2012-13, but it was brought down to 7.35 percent in 2019-20. Did the anti-inflation party forget that retail inflation was above 9 percent for 22 out of 28 months during the Congress government? Sitharaman replied that the opposition, who failed to control inflation during the Congress period, are now clamoring for 7 percent inflation.

The opposition criticized the Center for imposing five percent GST on food items such as pens and pencils, milk etc. On this, Sitharaman said that GST has not been implemented on pen-pencils. The little girl may have written a letter to Modi, but let’s face the facts. While levying GST on food grains like milk, only branded items have been taxed. GST is not applicable on extra milk or other food. So the burden of GST has not been put on the poor. Therefore, opponents should not spread misunderstandings, said Sitharaman

NCP MP Supriya Sule asked that decisions are not taken by consensus in the GST Council, name the states which opposed it. On top of that, not a single state had opposed the implementation of GST on food grains. A three-level discussion was held in this regard. Sitharaman highlighted that the decision to implement five percent GST was taken unanimously.

It is being criticized that India’s economic situation will become like that of Pakistan and Sri Lanka. But, economists like Raghuram Rajan have rejected this possibility. The debt ratio is 56.29 percent of the national gross income. On the contrary, the debt ratio of Japan, America, Greece, Spain, France and Canada has gone into triple digits. There is a risk of 4 thousand banks going bankrupt in China. The NPL ratio of banks in India is at a six-year low of 5.9 percent. Sitharaman argued that the amount of GST collection was 1.49 lakh crore in July this year and it was the highest in April at 1.69 lakh crore.

India is facing many crises like Corona disaster, second wave crisis, layoffs in China, Ukraine-Russia war. Even a developed country like America has not been able to save itself from the difficult situation. The International Monetary Fund, World Bank and other financial institutions have also changed their global economic growth forecasts from time to time. The rate of global economic growth has been reduced. Even in such a situation, the claim of these financial institutions that India’s economy is the fastest growing economy in the world has remained, said Sitharaman.

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