Govt handling economy well, crisis began when Manmohan Singh was PM and Raghuram Rajan RBI governor: FM Nirmala Sithraman

WASHINGTON DC: Union Finance Minister Nirmala has categorically rejected former prime minister Dr Manmohan Singh's criticism of the Centre's handling of the national economy, saying the government knows its job well.

The Finance Minister said that ''a political assessment is being made. No one can stop that. But, we do have a coherent narrative on how to handle the economy.''

Defending the measures taken by the Narendra Modi government to strengthen the economy, FM Sitharaman further said, ''We do have a listening government which responds to the affected sectors.''

FM Sitharaman, while admitting that ''there is some difficulty'', said, ''We do have to recall what went wrong. And while recalling what went wrong – it certainly pertains to a period when Manmohan Singh was PM and Raghuram Rajan was RBI Governor.''

FM, however, said that she does not want to start any blame game as she respected Dr Singh while adding that it is important to recall when and what went wrong. 

She added that India will become a USD 5 trillion economy in an open and transparent manner. ''I wish the Congress has the courage and conviction to hear it loud and clear,'' she stated.

Referring to the India-US trade deal, the FM said, ''I hope to have an agreement sooner. I know the intensity with which negotiations are going on. Few issues on which there could be differences are being sorted out.''

#WATCH Finance Minister Nirmala Sitharaman in Washington DC, on India-USA trade deal: I hope to have an agreement sooner. I know the intensity with which negotiations are going on.Few issues on which there could be differences are being sorted out pic.twitter.com/hVglZn5iUo — ANI (@ANI) October 18, 2019

The remarks from the Finance Minister came hours after former PM Manmohan Singh said that slowdown and the government apathy was affecting the economy badly.

It may be recalled that in New York recently, FM Siharaman had accused Manmohan Singh of leaving behind "a nasty stink of corruption" in the public banking sector, which suffered its "worst phase" under him and former Reserve Bank Governor Raghuram Rajan.

During Rajan`s tenure "loans were given just based on phone calls from crony leaders and public sector banks in India till today are depending on government equity infusion to get out of that mire," she had said on Tuesday during a lecture at Columbia University.

"Indian public sector banks did not have the worst phase than when (there was) the combination of Dr Manmohan Singh and Dr Raghuram Rajan, as the Prime Minister and the Governor of the Reserve Bank," Sitharaman said.

She was responding to an audience members question about Rajan`s reported criticism that Prime Minister Narendra Modi`s government is "extremely centralised" and does not have a "consistent and articulated vision" for economic growth.

Lashing out at Rajan, Sitharaman said, "Rather too democratic leadership, which probably will have the approval quite a lot of liberals, I am afraid left behind such a nasty stink of corruption which we are cleaning up even today."

Responding to FM's remarks, Singh on Thursday said that he does not think there is "any hope" of the Indian economy reaching the target of five trillion dollars by 2024 as the growth rate is "declining year after year".

"I have said this publicly before that to reach a goal of five trillion dollar by 2024, as against 2.7 trillion dollar that we had in 2018, would require a growth rate of 10-12 per cent per annum. What is happening in BJP regime is that the government is faced with the prospect of a declining rate of growth year after year," Singh said while addressing a press conference.

"IMF (International Monetary Fund) has come with the statement that India`s growth rate during the current fiscal year will be only 6.1 per cent as against 7.3 per cent mentioned some months ago. With growth rate declining year after year, I don`t think there is any hope of economy reaching the target of five trillion dollars by 2024," he added.

Last month, Singh had stressed the need for adopting a "well-conceived national strategy to make India a five trillion dollar economy".While addressing an event at Laxmipat University in Jaipur, Singh had said, "Presently our country seems to have slowed down somewhat. The rate of GDP is declining. The investment rate is stagnant. Farmers are in distress. The banking system is facing a crisis, and unemployment is going up. We need a well-conceived national strategy to make India a five trillion dollar economy".