JOIN USFM Nirmala Sitharaman seeks to silence critics on poor demand management
In a hard-hitting reply to critics who blame the government for not adequately addressing the demand side issues leading to consumption slowdown in Covid-battered economy, Finance Minister Nirmala Sitharaman Wednesday said the demand side is completely able to manifest itself and that there are no water tight compartments in the real economy.
It is only textbook economics that presents a clear cut division in demand and supply. In real economy both overlap, she said
"The resilience of the Indian economy is highlighted by the fact that it has recovered sharply after the Covid-19 pandemic. Despite the pandemic, India is still one of the fastest growing economies in the world. New age industries will bring demand to conventional products," she said at a CII's Global Economic Policy Summit.
"If the ship and chip shortage had not been there, growth would have been even higher," she said.
Critics have been saying since the first Covid wave, the economic recovery is losing sheen due to lack of demand for goods or consumption.
The spike in consumer spending suggests not just pent up demand, but that life is getting restored after a crisis of this scale, Sitharaman said, adding the labour market also indicates the presence of semi-skilled and high-skilled labour who value their skill sets and are in a position to bargain while looking for employment.
Sharing her views on public sector banks, she said they have been able to bring down their net bad loans to 2.9% for the quarter ending September 2021.
She said drives taken up by scheduled commercial banks resulted in significant increase in credit growth from 5.1% in September 2020 to 6.8% in September 2021.
Speaking on climate change and clean fuel, she said "there is a need to focus on natural gas as a transitional fuel towards use of green energy," she said adding despite government's commitment towards to the use of natural gas as a transitional fuel, high global crude oil prices present a challenge for India to import more natural gas".
She urged industry to increase investments in green fuels in order to help India meet its COP26 goals.
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