Finance Minister Nirmala Sitharaman said India’s economy grew faster than most major emerging market economies in Q2 2022-23, including Brazil, Mexico, China, South Africa and Thailand. India’s fiscal policies amid a challenging macro environment are being praised globally, she said in Parliament today.
After hitting double digital growth in the previous quarter, India's economy grew at 6.3% in the July-September quarter of 2022-23 vs 8.4% in the same period last year. The slowing of growth was attributed to low base, drag from global spillovers, elevated inflation and slackening of external demand. However, India still remains one of the fastest-growing economies in the world.
Citing the latest India Development Update by the World Bank, the FM quoted the global body saying, the (Indian) government's “policy response to the external choices aimed at maintaining macroeconomic stability and protecting vulnerable households has been carefully designed and well-targetted, given increasingly limited fiscal space”.
On forex reserves, the FM said the report stated that above $500 billion, “India’s forex reserves are among the largest holdings of international reserves in the world and together with net forward assets, provide an adequate buffer against global spillovers”.
On the discussion on the supplementary demands for grants (2022-2023) and demands for excess grants (2019-2020) in the Lok Sabha today, the FM said around 130 central schemes have been clubbed to 65 to make them more focused and to bring administrative efficiency. “None have been closed or shut down.”
She said a supplementary grant worth ₹1.09 lakh crore is being sought for fertiliser subsidy. "India is a big importer of fertiliser. We also have to focus on being self-reliant in the field of fertilisers," said Sitharaman.
During the 2008-09 global financial crisis, through two supplementary demands for grants (SDG), 20% of what was stated under budget estimates was brought under supplementary demands, she said. “In 2021, 2 SDGs in which 19% of what was stated under BE were brought under supplementary demands.”
“And now with the first batch of supplementary demands for grants (2022-23), and possibly one more during the Budget time and not beyond that, only 8 % of current BE has been brought in under supplementary demands,” she said.
On stagflation, the FM said it occurs when there is a slowdown in the economy and there's a high inflation rate. "According to the new data, retail and wholesale inflation rates are low. India is among the fastest-growing economies. That's why the situation of stagflation is not possible."
India's retail inflation eased to an 11-month low of 5.88% in November 2022. It came down below the RBI's upper tolerance level — i.e. 6% – for the first time this year. Like its global peers, India has been severely impacted by high inflation, prompting the RBI to announce tightening monetary measures.
Talking about state-owned PSU BSNL, the FM said in 2019-20, ₹54,000 crore was given to the telco. “Now through supplementary demands for grants, I am giving ₹60,575 crore for BSNL. BSNL gets its due recognition & infusion during Modi government.”