Lok Sabha Question No. 1778 (UNSTARRED), answered on 2020-03-02
Subject: Falling GDP
Ministry: FINANCE
Asked by: Rajan Baburao  Vichare

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 1778

TO BE ANSWERED ON 02.03.2020

## FALLING GDP

## † 1778. SHRI RAJAN VICHARE:

Will the Minister of FINANCE be pleased to state:

- (a) whether it is true that India's falling GDP is responsible for the world recession and if so, the details thereof;
- (b) whether the Government has taken any significant steps to overcome the economic slowdown and if so, the details thereof;
- (c) whether any steps have been taken by the Government to stop the rising inflation and if so, the details thereof;
- (d) whether the Government is going to take more money from the Reserve Bank of India again and if so, the details thereof;
- (e) the details of money paid by India in the last one year as the World Bank loan;
- (f)  the amount of loan which India has taken from a foreign country or institution in the last one year along with the rate of interest; and
- (g) whether the Government has taken any step to stop the increasing NPA of LIC and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a):  India's  growth  trajectory  over  the  period  2014-15  to  2018-19  is  characterized  by macroeconomic stability  with  real  GDP  growth averaging  7.4  per  cent,  significantly  higher than that of any comparable peer, both among advanced and emerging market economies.
- As    in    other    major    economies,    India's    Gross  Domestic  Product  (GDP)  growth  also correlates  with  the  growth  of  global  output. As per World Economic Outlook Update of January 2020  published by IMF,  world  output growth  is  estimated  to grow  at  its  slowest pace of 2.9 per cent since the global financial crisis of 2009, declining from a subdued 3.6 per cent in 2018 and 3.8 per cent in 2017. The recent moderation in India's growth coincides with a deceleration in growth of global output. World Economic Outlook  Update  of  January 2020  has  projected  the  growth  of  Indian  economy  to  increase  to  5.8  per  cent  in 2020  expecting  India   to   contribute  significantly  to  an  eventual  pickup  in  the  growth  of world output.
- (b): Government has implemented several major structural reforms in recent years to bolster investment and growth. These, inter-alia, include Insolvency and Bankruptcy Code (IBC) to strengthen  the  financial  system,  Goods  and  Services  Tax  (GST)  to  simplify  the  indirect taxation  regime,  Make-in-India  programme  to  boost  domestic  manufacturing  capacity, liberalization of Foreign Direct Investment (FDI) and Jan Dhan-Aadhaar-Mobile (JAM) Trinity towards greater transparency, efficiency and financial inclusion. Recently, the corporate tax rate  has  been  cut  to  15  per  cent  for  new  domestic  manufacturing  companies,  which  is

amongst the lowest in  the  world.  In  December 2019, the government  has  announced the Rs.103 lakh crore National Infrastructure Pipeline which would significantly boost infrastructure  and  spur  growth  impulses  in  the  economy.  Union  Budget  2020-21  has  also announced  a  number  of  measures  to  support  broad-based  and  inclusive  economic development.  These,  inter-alia,  include  rationalization  of  personal  income  tax  rates  to support domestic demand, a 16-point action plan for holistic development of the agriculture sector and critical measures to boost infrastructure and rural spending. The improvement in growth and the measures announced in the Union Budget 2020-21 are expected to further strengthen the economy.

- (c): The recent spike in CPI-C inflation is mainly on account of temporary increase in food price inflation. Government has taken various measures from time to time to stabilize prices of essential food items which, inter-alia , include appropriately utilizing trade and fiscal policy instruments  like  import  duty  and  export  management  through  instruments  like  Minimum Export Price, export restrictions, etc. to regulate domestic availability and moderate prices; imposition of stock limits and advising States for effective action against hoarders & black marketers. Government is implementing Price Stabilization Fund (PSF) to help moderate the volatility in prices of agri-horticultural commodities and has taken several measures recently to control prices of onions and pulses.
- (d): An aggregated amount of Rs. 1,75,987.72 crore as surplus funds has been transferred from RBI to the Government. While accounted for Non-tax revenue receipts, Rs. 28000 crore was taken in 2018-19 as interim dividend and the balance of Rs. 1,47,987.72 crore in 201920. The transfer of surplus in 2019-20 was as per the recommendations of the Bimal Jalan Committee. In the BE 2020-21, an amount of Rs. 72000 crore has been included. The final surplus transfer is subject to approval of the Central Board of Directors of RBI.
- (e): Repayment  of loans to World Bank (International Bank for Reconstruction & Development, and International  Development  Association)  during  2018-19  and  2019-20  is given below.
- (f): Utilization of loan (drawdown) from foreign countries/institution during 2018-19 and 201920 is given in Annexure I. Details of interest rates are given in Annexure II.
- (g): Non-Performing Assets (NPAs) are under close observation of LIC and necessary efforts are being taken towards identification of stress in debt, management of stress and resolution

Repayment of Government Loans from 2018-19 (Rs. crore)

|       |   2018-19 |   2019-20 |
|-------|-----------|-----------|
| Total |   19120.2 |   18071.4 |

Note: Data for 2019-20 is upto 24/02/2020 and for 2018-19 is provisional

Interest Payment of Government Loans from 2018-19 (Rs. crore)

|       |   2018-19 |   2019-20 |
|-------|-----------|-----------|
| Total |      0.35 |      0.37 |

Note: Data for 2019-20 is upto 25/02/2020 and for 2018-19 is provisional

of NPAs under the Stressed Assets Cell set up at LIC Central Office in FY 2018-19. As per RBI's recent circular dated 7 th June 2019 on 'Resolution of Stressed Assets', LIC is part of the Inter-Creditor Agreement for Resolution of Stressed Assets in line with Banks and other Financial Institutions.

| Annexure I Utilisation of Government Loans From 2018-2019 To 2019-2020                                                              | Annexure I Utilisation of Government Loans From 2018-2019 To 2019-2020                                                              | Annexure I Utilisation of Government Loans From 2018-2019 To 2019-2020                                                              | Annexure I Utilisation of Government Loans From 2018-2019 To 2019-2020                                                              |
|-------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|
| Donor                                                                                                                               | Loan Currency                                                                                                                       | 2018-2019                                                                                                                           | (in thousands)                                                                                                                      |
| Asian Development Bank                                                                                                              |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | USD                                                                                                                                 | 14,57,587.64                                                                                                                        | 16,18,526.58                                                                                                                        |
|                                                                                                                                     | INR                                                                                                                                 | 1023,29,173.56                                                                                                                      | 1165,86,241.54                                                                                                                      |
| Asian Infrastructure Investment Bank                                                                                                |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | USD                                                                                                                                 | 1,75,698.37                                                                                                                         | 1,11,963.70                                                                                                                         |
|                                                                                                                                     | INR                                                                                                                                 | 122,00,513.50                                                                                                                       | 79,10,842.49                                                                                                                        |
| European Investment Bank                                                                                                            |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | EUR                                                                                                                                 | 1,00,000.00                                                                                                                         | 1,50,000.00                                                                                                                         |
|                                                                                                                                     | INR                                                                                                                                 | 79,85,480.00                                                                                                                        | 118,99,965.00                                                                                                                       |
| Germany                                                                                                                             |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | EUR                                                                                                                                 | 2,18,226.95                                                                                                                         | 1,44,632.24                                                                                                                         |
|                                                                                                                                     | INR                                                                                                                                 | 176,06,202.20                                                                                                                       | 113,35,985.68                                                                                                                       |
| France                                                                                                                              |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | EUR                                                                                                                                 | 1,21,056.12                                                                                                                         | 1,69,293.00                                                                                                                         |
|                                                                                                                                     | INR                                                                                                                                 | 97,76,619.74                                                                                                                        | 132,56,403.79                                                                                                                       |
| Japan                                                                                                                               |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | JPY                                                                                                                                 | 2229,44,876.47                                                                                                                      | 1537,01,827.95                                                                                                                      |
| Russian Federation                                                                                                                  |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | USD                                                                                                                                 | 5,05,186.54                                                                                                                         | 2,39,102.25                                                                                                                         |
|                                                                                                                                     | INR                                                                                                                                 | 356,13,454.36                                                                                                                       | 168,79,122.87                                                                                                                       |
| International Bank for Reconstruction and Development                                                                               |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | USD                                                                                                                                 | 11,40,071.91                                                                                                                        | 20,56,994.06                                                                                                                        |
| International Development Association                                                                                               |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | USD                                                                                                                                 | 3,62,321.32                                                                                                                         | 3,46,593.60                                                                                                                         |
|                                                                                                                                     | INR                                                                                                                                 |                                                                                                                                     | 252,53,660.61                                                                                                                       |
| International Development Association                                                                                               |                                                                                                                                     | 252,22,199.14                                                                                                                       |                                                                                                                                     |
|                                                                                                                                     | XDR                                                                                                                                 | 3,58,869.70                                                                                                                         | 3,87,982.51                                                                                                                         |
|                                                                                                                                     | INR                                                                                                                                 | 348,24,211.85                                                                                                                       | 378,69,054.03                                                                                                                       |
| I F A D                                                                                                                             |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | USD                                                                                                                                 | 9,131.47                                                                                                                            | 13,743.84                                                                                                                           |
|                                                                                                                                     | INR                                                                                                                                 | 6,20,809.26                                                                                                                         | 9,70,129.59                                                                                                                         |
| I F A D                                                                                                                             |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | XDR                                                                                                                                 | 22,644.47                                                                                                                           | 32,338.73                                                                                                                           |
|                                                                                                                                     | INR                                                                                                                                 | 22,02,829.66                                                                                                                        | 32,32,052.97                                                                                                                        |
| New Development Bank                                                                                                                |                                                                                                                                     |                                                                                                                                     |                                                                                                                                     |
|                                                                                                                                     | USD                                                                                                                                 | 1,40,017.37                                                                                                                         | 2,31,508.71                                                                                                                         |
|                                                                                                                                     | INR                                                                                                                                 | 98,07,474.27                                                                                                                        | 168,48,682.03                                                                                                                       |
| Grand Total (INR)                                                                                                                   | Grand Total (INR)                                                                                                                   | 4778,14,959.95                                                                                                                      | 5174,61,010.67                                                                                                                      |
| Note : Data for current financial year (2019-2020) upto 24/02/2020 . Provisional 2018-2019,2017-2018                                | Note : Data for current financial year (2019-2020) upto 24/02/2020 . Provisional 2018-2019,2017-2018                                | Note : Data for current financial year (2019-2020) upto 24/02/2020 . Provisional 2018-2019,2017-2018                                | Note : Data for current financial year (2019-2020) upto 24/02/2020 . Provisional 2018-2019,2017-2018                                |
| (i) Loan Currencies can not be summarized as they are in different currencies. However the summary in loan currencies is as under : | (i) Loan Currencies can not be summarized as they are in different currencies. However the summary in loan currencies is as under : | (i) Loan Currencies can not be summarized as they are in different currencies. However the summary in loan currencies is as under : | (i) Loan Currencies can not be summarized as they are in different currencies. However the summary in loan currencies is as under : |
| Grand Total (USD)                                                                                                                   | Grand Total (USD)                                                                                                                   | 37,90,014.62                                                                                                                        | 46,18,432.74                                                                                                                        |
| Grand Total (EUR)                                                                                                                   | Grand Total (EUR)                                                                                                                   | 4,39,283.07                                                                                                                         | 4,63,925.25                                                                                                                         |
| Grand Total (JPY)                                                                                                                   | Grand Total (JPY)                                                                                                                   | 2229,44,876.47                                                                                                                      | 1537,01,827.95                                                                                                                      |
| Grand Total (XDR)                                                                                                                   | Grand Total (XDR)                                                                                                                   | 3,81,514.17                                                                                                                         | 4,20,321.24                                                                                                                         |

Source: Aid Accounts and Audit Division of Department of Economic Affairs, Ministry of Finance

| Annexure II Summary of Terms and Conditions of external Agencies (Loans/Credits)   | Annexure II Summary of Terms and Conditions of external Agencies (Loans/Credits)   | Annexure II Summary of Terms and Conditions of external Agencies (Loans/Credits)   | Annexure II Summary of Terms and Conditions of external Agencies (Loans/Credits)   | Annexure II Summary of Terms and Conditions of external Agencies (Loans/Credits)                              |
|------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|
| S. No.                                                                             | Donor                                                                              | Currency                                                                           | Type of Loan/Credit                                                                | Rate of Interest                                                                                              |
| 1                                                                                  | Asian Development Bank (ADB)                                                       | USD                                                                                | Variable                                                                           | 6 Month USD LIBOR + Fixed Spread (0.40 to 0.60)+ maturity premium                                             |
| 2                                                                                  | International Development Association (IDA)                                        | SDR                                                                                | Fixed                                                                              | Service Charges - 0.75% p.a. (Loans signed upto June, 2011)                                                   |
| 2                                                                                  | International Development Association (IDA)                                        | SDR                                                                                | Fixed                                                                              | Service Charges - 0.75% p.a. plus Interest-1.25% p.a. (Credits signed from July 2011 to June 2015)            |
| 2                                                                                  | International Development Association (IDA)                                        | SDR                                                                                | Fixed                                                                              | Hard Terms IBRD Lending rate less 200 basis points plus Service Charges - 0.75% p.a.                          |
| 2                                                                                  | International Development Association (IDA)                                        | USD                                                                                | Variable                                                                           | 6 Month USD LIBOR + Fixed Spread (Credits signed after June 2015)                                             |
| 3                                                                                  | International Bank for Reconstruction and Development (IBRD)                       | USD                                                                                | Variable                                                                           | 6 Month USD LIBOR + Variable Spread+ maturity premium                                                         |
| 4                                                                                  | Japan (JICA)                                                                       | JPY                                                                                | Fixed                                                                              | General Terms - 1.40% p.a. (Standard Rate). Preferential Terms - 0.65% p.a. Consultancy Services - 0.01% p.a. |
| 5                                                                                  | Germany (KFW)                                                                      | Euro                                                                               | Fixed                                                                              | Treasury 0.75%                                                                                                |
| 5                                                                                  | Germany (KFW)                                                                      | Euro                                                                               | Fixed                                                                              | Bank 1.81% p.a. to 2.49% p.a.                                                                                 |
| 5                                                                                  | Germany (KFW)                                                                      | Euro                                                                               | Variable                                                                           | 6 Month EURO EURIBOR + Fixed Margin                                                                           |
| 6                                                                                  | France                                                                             | Euro                                                                               | Variable                                                                           | 6 Month EURO EURIBOR + Fixed Margin                                                                           |
| 7                                                                                  | International Fund for Agricultural Development (IFAD)                             | SDR                                                                                | Fixed                                                                              | Interest rate:1.25% plus a Service Charges - 0.75 %p.a.                                                       |
| 8                                                                                  | Russian Federation                                                                 | USD                                                                                | Fixed                                                                              | 4% p.a.                                                                                                       |
| 9                                                                                  | Asian Infrastructure Investment Bank (AIIB)                                        | USD                                                                                | Variable                                                                           | 6 Month USD LIBOR + Fixed Spread                                                                              |
| 10                                                                                 | New Development Bank (NDB)                                                         | USD                                                                                | Variable                                                                           | 6 Month USD LIBOR + Fixed Spread                                                                              |
| 11                                                                                 | European Investment Bank (EIB)                                                     | Euro                                                                               | Variable                                                                           | 6 Month Euro EURIBOR + Fixed Spread                                                                           |

Note: Commitment Charges are charged on undisbursed balances of committed loans amount. SDR - Special Drawing Rights

Source: Aid Accounts and Audit Division of Department of Economic Affairs, Ministry of Finance