Higher spending by the government will not result in a rating downgrade for India, which currently has an investment grade rating, Finance Minister Nirmala Sitharaman said on Wednesday.
Replying to a debate on Finance Bill 2021 in the Rajya Sabha, Sitharaman attacked the Congress-led UPA government for mismanaging the economy.
In her Budget speech, the finance minister had pegged India's fiscal deficit at 9.5 per cent in FY21 and 6.8 per cent in FY22. Hit by the coronavirus pandemic, India's gross domestic product (GDP) is likely to contract 8 per cent in FY21 before rebounding to a double-digit growth in FY22, albeit on a lower base.
Sitharaman said that under the Modi government, Indian economy has seen lower inflation, higher GDP growth, record foreign investments and lower fiscal deficit.
The measures taken in response to the 2008 global financial crisis by the UPA led to high inflation and 'taper tantrums', she said.
Comparing the GDP growth between the NDA and UPA governments, she said India's average GDP growth was 7.5 per cent between 2014-2019 as against 6.7 per cent during 2009-2014. Similarly, average inflation fell from 10.3 per cent under five years of UPA government to 4.8 per cent under the first five years of NDA government, she said.
Fiscal deficit has also been contained at 3.65 per cent of the GDP during 2014-19 as compared to 5.3 per cent in the previous five years, she said, adding current account deficit has also improved from (-)3.34 per cent to (-)1.43 per cent.
Foreign exchange reserves, the finance minister said, have grown from USD 303 billion in 2014 to USD 411.9 billion, while NPAs declined to Rs 8.99 lakh crore as of March 2020.
(With inputs from PTI)