The country did not slip into an economic recession because of the targeted approach taken by Prime Minister Narendra Modi to give relief to people during the COVID-19 pandemic, Finance Minister Nirmala Sitharaman said on Wednesday. She was replying to a debate on two appropriation Bills seeking House approval for additional funds to be used during this financial year. Both the Bills were returned by the Rajya Sabha after her reply.
Responding to former Finance Minister P. Chidambaram, who spearheaded the Opposition by initiating the debate on Monday, Ms. Sitharaman said the countries who went by the advice of “borrow and spend and even print money to reboot the economy” had to face recession. “Thankfully, the targeted way in which the Prime Minister decided to give relief during COVID-19 and address the concerns — that were given as inputs from various stakeholders — has kept us on the safe course of helping revival, and not getting into recession,” she said.
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She said both the IMF and the World Bank have said on several occasions that India was the brightest spot in the global economy and was an island of hope for global growth.
On questions about additional expenditure of ₹3.25 lakh crore in 2022-23, she said the Centre came up with the Supplementary Demand for Grants essentially to ensure food security and subsidy for fertilizers, which is critical for farmers. She said the additional amount was to ensure that the poor and the farmers were given enough support.
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On the revenues for this additional expenditure, she said, “In September itself, the Government of India had made it very clear that we are not changing our borrowing schedule.” The Minister said the Centre would ensure that the revenue generated would be sufficient to take care of the addition, emphasising that there was enough buoyancy that gave her confidence.
On cutting corporate tax, Ms. Sitharaman recalled that in 1991, then Finance Minister Manmohan Singh cut it to 40% from 45%. “Then in 1997, the then Finance Minister P. Chidambaram brought the corporate tax down to 35% from 40%, after abolishing the surcharge also. Then, from 2000 onwards, surcharges were back, raising the total corporate tax again to about 36-38% which continued for the next five years after that. But, then, it was Mr. Chidambaram again, who reduced the corporate tax to 30% in 2005, although along with the surcharge, the actual rate was about 33%. Were they also a bonanza to corporates? Were they bonanzas at that time?” she asked.
