Calcutta, Sept. 14: President Pranab Mukherjee today recalled how the economy had grown between 2009 and 2011 before hitting a lower growth trajectory again — an account that stood out against the backdrop of suggestions that the seeds of the current slowdown were sown when he was finance minister.
“All of us are concerned about the slow growth of the GDP in 2011-12 and 2012-13. It began in 2008-09 when, as a consequence of a major international financial crisis, India’s GDP (growth) came down from 9 per cent-plus to 6.7 per cent in 2008-09. Thereafter, there was an improvement. In 2009-10 and 2010-11, the economy registered growth of 8.7 per cent and 9.3 per cent,” the President said.
“But again there was a slump because the world economy did not fully recover from the downtrend of 2008-09…. India, in a globalised economy, is no exception,” Mukherjee told the annual general meeting of the Bengal Chamber of Commerce and Industry in Calcutta.
The President, a stickler for constitutional propriety, had prefaced his comments by referring to his constraints. “I am constrained because the President does not have the privilege to air his or her views… though every executive order of the government of India is issued in the name of the President,” he said.
The statement by Mukherjee, who wore a hint of a smile all through his 25-minute speech, came on the heels of remarks — some of them made by his successor P. Chidambaram — on the purported reasons that led to the rupee’s crash.
Chidambaram, who succeeded Mukherjee at the finance ministry, had told Parliament on August 27 during an uproar over the value of the rupee: “When I took over (as finance minister) in August 2012, I knew that I was returning to a difficult pitch. Fiscal deficit limits had been breached. The CAD (current account deficit) had swelled. These were the two main challenges.”
Chidambaram had attributed the spurt in the deficits to “certain decisions that we took during the period 2009 to 2011”. Chidambaram did not name anyone. Mukherjee was finance minister between January 24, 2009, and June 26, 2012.
Chidambaram’s assessment had prompted suggestions that he was referring to the “stimulus package” the government had offered to counter the economic slowdown in September 2008.
Some Opposition leaders and economists said that the stimulus package — in the form of reduced duties and higher government spending — was lopsided as the reliance was only on consumption expenditure and hence there was no return from the investments.
The first tranche of the stimulus package of Rs 20,000 crore was announced by the Prime Minister, not Mukherjee.
Mukherjee today took care to allay the economic “concerns”, saying “certain fundamentals of the economy are strong” and “there is no room for gloom”.