Amid Battle Against Worst Slowdown in 11 Yrs, FM's 'Feel Good' Plan for India: Rate Budget 2020 Here

New Delhi: Even as the International Monetary Fund (IMF) blamed the slowdown in India for creating a drag worldwide, Finance Minister Nirmala Sitharaman on Saturday announced that the country is now the fifth largest economy in the world and the Central government debt has reduced to 48.7 per cent of GDP from 52.2 per cent in March 2014.

Assuring that the Union Budget for 2020-21 was aimed at boosting income and purchasing power of people, Sitharaman told Parliament that the fundamentals of the economy are strong and inflation has been well contained, while banks cleaned up accumulated loans. She termed GST as a historic structural reform, saying it integrated the country economically.

The finance minister also claimed that India had uplifted 271 million people out of poverty. The government aims to achieve seamless delivery of services through digital governance, she added. "We shall strive to bring ease of living for every citizen," Sitharaman said.

The Union Cabinet headed by Prime Minister Narendra Modi on Saturday approved the Budget for the financial year beginning April 1, as government makes effort to lift the economy from the worst economic slowdown in 11 years.

Before coming to Parliament for presenting her second budget, Sitharaman and her team met President Ram Nath Kovind. She was accompanied by Minister of State for Finance Anurag Thakur and top officials of her ministry including Finance Secretary Rajiv Kumar.

"As per tradition, Finance Minister @nsitharaman calls on President Kovind at Rashtrapati Bhavan before presenting the Union Budget," tweeted the President of India's handle along with two photographs from the meeting.

Like last year, Sitharaman opted for a traditional red-coloured 'bahi-khata' to carry budget documents. Dressed in a crisp yellow silk saree, she posed for cameramen at the Parliament House gate with the budget documents wrapped in a red silk cloth, adorned with a golden Indian emblem.

Facing the worst economic slowdown in more than a decade, Sitharaman is expected to pull out all stops to spur consumer demand and investment, government sources and economists said.

The real gross domestic product (GDP) growth is estimated to fall to an 11-year low of 5 per cent in FY20 from 6.1 per cent in FY19. Estimated nominal growth at 7.5 per cent in FY20 is the lowest since 1975-76 (FY76) as per the FY12-based GDP series.

Index of Industrial Production (IIP) growth turned positive but remained low at 1.8 per cent in November 2019 after contracting by (-) 4 per cent in October 2019. Consumer Price Index (CPI) inflation increased to a 65-month high of 7.4 per cent in December 2019, its fifth sequential rise, mainly due to persistently rising vegetable prices. Also, growth in bank credit fell to a 25-month low of 8 per cent in November 2019.