Recession, slowdown or tough days? Nirmala Sitharaman’s blunt response

There are clear signs of revival of industrial production and fixed investment after economic growth plunged to a six-year low, Finance Minister Nirmala Sitharaman said at a news conference on Sunday to announce a string of steps to help the exports and realty sectors.

The fresh round of measures come on top of steps last month to boost vehicle purchases, attract foreign funds and boost investments in the economy.

The steps come against the backdrop of the Gross Domestic Product growth declining for the fifth consecutive quarter in April-June 2019 to 5 per cent, the lowest in six years.

As she responded to a barrage of questions on the stimulus that could cost the exchequer Rs 70,000 crore, there was one question that asked Sitharaman how she would describe the current state of the economy.

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“Some call it a recession, a slowdown and some, just tough days. How would you classify it,” a journalist asked. Sitharaman steered clear of the opportunity to put a name to it. “I am not here to give it a name. I am here to work,” she shot back.

The economic downturn has become a sticky political issue ahead of assembly elections in Maharashtra, Haryana and Jharkhand.

Former prime minister Dr Manmohan Singh this week also targeted the government over the economy this week, pinning the blame for the slower growth figures on what he called the “man-made blunders of demonetisation and a hastily implemented GST”. Dr Singh suggested that the government come up with a comprehensive package to pull up the economy.

Last month, the central bank also lowered its growth forecast for the year to 6.9 per cent. Yesterday, the International Monetary Fund underscored that India’s economic growth was going to be “much weaker than expected”.

Sitharaman, asked about the GDP growth rate and the IMF assessment, trashed a suggestion that the government was attempting the downplay the GDP numbers.

“I said I will work. And just because I have not said any name from my side. Govt (GDP) 5 per cent is not something that I am ignoring it,” she said, underscoring that everyone was “equally conscious” about the growth rate. “That is factually staring before us,” the minister said.

Sitharaman did not spell out a stand on the IMF assessment. “It is all out for all of us to see. It is also out for me to see,” she said.