India’s decision to refrain from pushing demand through handouts during the COVID-19 pandemic is paying off now, as developed countries like the U.S. and Germany, which relied on such stimulus packages, are now facing runaway inflation, Union Finance Minister Nirmala Sitharaman told Parliament on Friday.
Ms. Sitharaman also sought to dismiss comparisons between the growth rates of India and Bangladesh as inappropriate as she took on some members’ criticism about the Budget’s growth arithmetic as misleading. She went on describe the Congress-led UPA’s tenure as a ‘rahu kaal (evil hour) as well as ‘Rahul Kaal’ for the country. While she did not directly name Congress leader Rahul Gandhi during her speech, she brought up his actions of tearing-up a proposed law, that had been cleared by Cabinet, when he was a general secretary of the party.
Responding to former Finance Minister P. Chidambaram’s remark about the Budget speech referring to the Prime Minister more times than it mentioned the ‘poor’, she asked if he was referring to poverty as defined by a former Congress President as ‘a state of mind’.
“Of course, I am proud of being in the Prime Minister’s ministry. In every popularity rating, he is on top, but some people in our country suffer from visceral hatred of him,” Ms. Sitharaman said. The Minister quoted a Tamil proverb to describe the Opposition’s conduct that roughly translates to – ‘Nobody knows where the frog is during the rainy season. But thanks to its constant noise, we get to know it is there’.
Replying to the debate on the Union Budget in the Rajya Sabha in which 42 parliamentarians participated, Ms. Sitharaman emphasised that countries, which had spent large sums through direct handouts to their people during the pandemic, are facing ‘highly inflationary outcomes’ now.
“What happened to economies that gave cash handouts? Economies all over the world have suffered. U.S. inflation has hit a 40-year high. Huge cash transfers were given, stimulus was given. There are times when it is difficult to gulp some facts,” she said, adding that inflation is now at its highest point in 25 years for the Eurozone, 30 years in the UK and 20 years in Germany.
“All these allegations that we did not do enough… while we prioritised on Jaan bhi and Jahaan Bhi (life and livelihood) and helped vulnerable sections… Economist Ruchir Sharma made this observation in October 2021 that the pandemic stimulus backfired. ‘India can be thankful it didn't go in for aggressive stimulus spending… India's payoff for moderation was one of the strongest recoveries in emerging markets’,” Ms. Sitharaman noted.
Referring to a former economic advisor’s remarks about Bangladesh growing faster than India, she said such conclusions don’t present a correct picture. “Our economy is ten times bigger than Bangladesh, so if Bangladesh grew at 10% and we grew just at 1%, the absolute number in terms of growth will be the same,” she explained.
Dismissing a suggestion that the higher allocation for the Housing and Urban Affairs Ministry is on account of spending for the Central Vista project, the Minister said the increase is mainly on account of the urban component of the PM Awaas Yojana, outlays for which have been enhanced from ₹8,000 crore to ₹28,000 crore, ‘not because of Central Vista’.
Taking strong offence to an MP’s comment that the government’s policies were ‘remote controlled from somewhere, including Nagpur’, Ms. Sitharaman said this remark comes from a party where there is no internal party democracy and the policy was decided in 10, Janpath and announced in 7, LKM (Lok Kalyan Marg), the Prime Minister’s residence.
“A member who is not here now had mentioned, I hope I heard him right, said he does not see Amrit Kaal (time of nectar) but instead has been seeing rahu kaal since 2014,” Ms. Sitharaman said.
“One cannot forget that one general secretary of this party tore a Bill in public when the respected Prime Minister Dr Manmohan Singh was going to meet the U.S. President after two hours. Is that remote control or what is that?” she asked.
“Rahu Kaal is when a sitting PM was about to meet the U.S. President and a bill he cleared was torn up. Rahu Kaal is what produces what is called G23… it is where the Congress party is. Senior leaders are leaving their own party and getting out. That is Rahu Kaal. No wonder the Congress Party, which is facing the ‘Rahul Kaal’, is getting 44 seats and remaining there and is not able to go out,” she countered. “Ours is the Amrit Kaal. Rahu Kaal was thrown at me,” she concluded.
