Sitharaman Says Cong Kept Lofty Promises Only in Manifesto; Questions its 'Lack of Fiscal Knowledge'

In her X post, Union Finance Minister Nirmala Sitharaman drew a comparison between the BJP and Congress governments' development model claiming under Modi, the Centre did well in terms of fiscal management. She sought Rahul Gandhi's explanation over Congress's alleged failure to understand fiscal dynamics.

New Delhi: Finance Minister Nirmala Sitharaman on Monday targeted the Congress over the promises in its manifesto and called them "non-transparent and disconnected from reality".

"A lot has been said in recent times about the fiscal management (especially on debt) of our government under PM Modi’s leadership. Many times, absolute numbers have been compared without considering the GDP growth on which we base the debt calculation. I would like to put out a clear picture, unlike @INCIndia, which hides behind lofty promises that are non-transparent and disconnected from reality," she wrote on X.

The Finance Minister substantiated her claim with a detailed post. She questioned, "Has @INCIndia considered the cost of the lofty promises made in their manifesto? Have they calculated how much the 'Khata Khat' schemes will cost fiscally? Will they borrow substantially for them, or will they raise taxes to fund them?"

Much of her attack was directed at Congress leader Rahul Gandhi. She asked Gandhi to come up with explanations of Congress's alleged failure to understand fiscal dynamics. "Would @RahulGandhi care to answer these real questions and explain how their gigantic schemes of fiscal splurge would work without increasing taxes or borrowing heavily and running down the economy? Here’s a challenge to him to answer these questions for the people of India," she wrote.

Sitharaman also claimed that BJP government's fiscal management is better than the UPA government. "During the UPA rule from FY2004 to FY2014, Central Government Debt, including external debt at current values, grew about 3.2 times, from ₹18.74 lakh crore in March 2004 to ₹58.59 lakh crore in March 2014. This increase was much greater than the 2.9 times growth from ₹58.59 lakh crore in FY 2014 to ₹172.37 lakh crore in FY 2024 (RE). This lower increase between FY 2014 and FY 2024 occurred despite the impact of the COVID-19 pandemic, where the Centre borrowed to provide relief to those in need even as revenues fell," her post read.

She further pointed out that after the pandemic, Modi-led government pursued a balanced approach to fiscal consolidation while sustaining economic growth. According to her, the strategy reduced the fiscal deficit from 9.2% of GDP in FY 2020-21 to 5.8% in the Revised Estimates for FY 2023-24.

She cited figures to substantiate her claim. "The Interim Budget projects a further reduction to 5.1% of GDP in FY 2024-25. Similarly, the Central Government's debt-to-GDP ratio fell from 61.4% in FY 2020-21 to 57.1% in FY 2023-24," Sitharaman wrote.

She continued, "Under UPA, for 6 consecutive years between FY 2009 and FY 2014, the ratio of India's Gross Fiscal Deficit (GFD) to Gross Domestic Product (GDP) was at least 4.5%. It was between 4.5% - 5% of GDP in 3 out of the 6 years, between 5% - 6% in one, and more than 6% in 2 years. And there was no COVID-19-like crisis that needed such a quantum of fiscal expansion, showing poor fiscal management by UPA."

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