'Economy will rebound soon': Anurag Thakur responds to Chidambaram on GDP

Minister of state for finance and corporate affairs Anurag Thakur, in a pointed rebuttal to former finance minister and Congress leader P Chidambaram over his remarks on India's economic condition, said the economy is resilient and will rebound soon based on consistent reforms carried out by the government.

He said Chidambaram chose to "ignore hard data" and indulged in "whataboutery". "Consistent reforms and strong fundamentals have ensured India had a swift rebound from a contraction of 24.4 per cent in the 1st quarter of FY 2020-21 to a growth of 1.6 per cent in the 4th quarter of FY 2020-21," he said.

On the issue of the "gloomy forecast" by Chidambaram, Thakur said despite Congress' doubts, many of "international agencies project India to grow by 12.5 per cent in FY 2021-22". He said India could be the only major economy to have a projected double-digit growth in FY22.

Chidambaram had said on Tuesday that "the Indian economy is an island in isolation". Thakur asked if he was not aware that developed economies like France, Germany, Italy and the UK contracted by 8.2 per cent, 4.9 per cent, 8.9 per cent and 9.9 per cent, respectively. Canada, Russia, South Africa and the US, too, have seen a contraction in GDP in the past year, he noted.

Thakur further stated that Chidambaram should "shift gears from his gloom and doomsday prediction". "It is evident lockdown saved lives, and gradual unlocking allowed green shoots, which is evident from record Goods and Services (GST) collection, growth in passenger vehicle sales, higher cement, steel, oil consumption and international air cargo operations," he said.

Also read: Covid-19 impact: Q3 GDP revised to 0.5% from 0.4%

"High-frequency monthly core sector data also shows that the eight core industries were seeing a rebound. Index of eight core industries grew 11.4 per cent in March 2021 and a staggering 56.1 per cent in April 2021. Latest  GDP data also shows the manufacturing sector grew 6.9 per cent in the January-March 2021 quarter, construction 14.5 per cent; steel and cement 27.3 per cent and 32.7 per cent, respectively,  in March 2021," Thakur added.

On the issue of "cash transfers'', Thakur said during the NDA tenure of 2014-19, the government disbursed Rs 8 lakh crore on procurement of wheat and rice compared to Rs 3.74 lakh crore disbursed during the UPA's tenure 2009-14. He said India recorded the highest ever wheat procurement at 405 LMT, which is 4 per cent higher than the 390 LMT in Rabi marketing season 2020-21. During the Kharif marketing season of 2020-21, paddy procurement touched a high of 789 LMT, Thakur noted.

Also read: Covid second wave to have muted impact on economy: Finance Ministry

The eighth instalment of PM KISAN via direct benefit transfer provided Rs 19,000 crore directly to farmers. "Does this not give farmers "cash in hand," he asked.

Congress leader P Chidambaram on Tuesday said that if necessary, the Centre must print money in order to support the expenditure.

During a presser, the former finance minister said: "If necessary, the Government must print money. We have space and sovereign right to print money and if at any point the Government feels that too much is being printed, it can always stop printing it."

Also read: India's GDP contracts 7.3% in FY21; grows at 1.6% in Q4

He stated that this is the time to act "boldly and decisively" -- "borrow and spend". Chidambaram advised that if necessary, the Centre should "print money and spend on healthcare and infrastructure.

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