Union Finance Minister Nirmala Sitharaman on Friday said the Indian economy will grow at 7.4 per cent in this fiscal and continue at the same level in the next fiscal.
Sitharaman, speaking at the FE Best Banks Awards event in Mumbai, said, “Our own estimates have also shown based on the developments, that we are definitely at that range…7.4 (per cent) and that level will continue even next year.”
She highlighted that the International Monetary Fund and the World Bank have projected India’s economic growth to be the fastest for the next two fiscal years. The Finance Minister also said that their estimates are in sync with that of the Reserve Bank of India (RBI).
Pointing out at the “challenging global situation”, Sitharaman said that it is not the right time yet to throw caution to the winds. “The export sector will face difficulties as the global growth slows down, and the government will work with such entities to face the headwinds,” Sitharaman said.
Meanwhile, underlining that a debate is needed on the freebies policy, Sitharaman said that the political parties that come to power on pre-poll promises of freebies should pay for those through budgetary provisions.
Citing the example of free electricity being promised in many states, the Finance Minister said that the burden for the freebies should not be thrust upon the power discoms or gencos.
“If a promise has been made to the people at the time of the election, you are looking at a quid pro quo. You should be, as a responsible party, assume after you come to power, make a provision in the budget for it,” Sitharaman said at the event.
She added that in case of the power sector, there have been cases where states have paid the utilities in parts or not paid at all. “You end up shifting the burden to the discom which has not gone to the election. The discom has not asked for votes. Why should they be burdened? Do they have the power to stop continuing the supply? And similarly the gencos,” she said.
“The debate is not about what constitutes a freebie, but if you have given a promise, provision for it,” she added.
The spark on freebies comes amid a heated debate between the ruling BJP and Opposition parties like AAP. Earlier, Sitharaman had blamed Delhi Chief Minister Arvind Kejriwal for giving a perverse twist to the debate.
Sitharaman also suggested that the government supports deploying resources to aid one’s journey out of poverty and empowering people, but one should not look at such efforts as entitlements.
“This is an important issue for India to debate and all should join the debate,” she added.
(With inputs from PTI)