The finance minister needs a booster dose of confidence ahead of presenting her second budget

Finance Minister Nirmala Sitharaman has asked industry leaders to stop ‘self-doubt’ and unleash the animal spirits that have been missing in the economy all this while. But the boss in the North Block office herself seemed to be in need of a booster dose of confidence. The persistent criticism about her performance seems to have done its bit to shake her own confidence in doing whatever she is supposed to be doing.

The round of pre-budget consultations with business leaders produced its own fun-filled drama. Nirmala Sitharaman’s absence from Prime Minister Modi’s meeting with industrialists, despite the presence of ‘sundry’ ministers, produced an impromptu game of hide and seek between her and Congress.

“Where is the finance minister?”, quipped Shashi Tharoor, the Congress MP, who has a penchant for asking embarrassing questions, just as he relishes using cumbersome words in preference to straightforward vocabulary. “Can’t you see where I am?” tweets by the finance ministry seemed to ask a counter-question.

“Sir, the minister has already met economists on 20th Dec 2019, as a part of the pre-budget consultations,” her office tweeted, with photos of Nirmala Sitharaman meeting prominent economists and corporate leaders, including Uday Kotak of Kotak Mahindra.

Stung by criticism that the Modi government is presiding over the liquidation of the Indian economy, the Prime Minister has got into the act himself in trying to rectify the situation. Over the past few days he has held over a dozen meetings with groups of industrialists and economists. This has been described as the most extensive consultations that Modi has ever held on the economy in the past five years.

It was the absence of Nirmala Sitharaman from these meetings that raised the curiosity of media and sections of the political leadership. It is a different matter that her presence may not have made much material difference to the deliberations.

Modi’s meetings achieved at least one thing. He acknowledged that the economy was facing a slow-down, although the reference was made to highlight the capacity of the Indian economy to bounce back. Nirmala Sitharaman has been refusing to accept there has been a slow-down, an approach that prevented any real solution to the current economic problem.

The finance minister has been trying to talk down the economic crisis and solve the problem through posturing and symbolism rather than concrete action. Her stimulus programme, introduced initially through ‘Equated Weekly Instalments’, and now with lesser frequency, has failed to make any mark and the economy continues to suffer from lack of demand.

Nirmala Sitharaman goes on like a broken record, blaming all the ills of the economy on the ‘misrule’ of the UPA regime, little realising that the Modi government has been in power for more than one tenure. Her first budget, the papers of which were brought to parliament in a folder wrapped in red cloth, another meaningless symbolism, did very little to tackle the problems in the economy.

Most of the initiatives came outside the budget, which was incidentally reduced to a political speech, attracting widespread criticism. In her budget speech, she deliberately withheld numbers relating to the government’s overall revenue and expenditure, for both the previous year and the current year.

It turned out that figures of revenue and expenditure of 2018-19 as provided in the documents were not just misleading but actually false. The doubts led to an unprecedented situation in which the finance minister had to claim that the numbers were indeed authentic.

"The data which is given in the budget is 100 per cent above board...there need not be any speculation on the figures which have been given out. Every number is authentic," the minister said while replying to the concerns raised by members during the discussion on the budget in the Lok Sabha. No other finance minister has had to make such a claim.

All her optimism notwithstanding, the economy is in dire straits. And the latest estimates paint even a more dismal picture. The Central Statistics Office has projected the growth rate for 2019-20 at 5 per cent, the lowest in the current series with 2011-12 as the base year. This is quite a climb down from the 7 percent projected by the Economic Survey and marks an 11-year low.

Everyone is looking forward to her new gimmicks in the presentation of her second budget. In place of her red cloth to wrap the budget papers like last year, she can probably come dressed in a traditional red khadi saree, like the legendary Shivabhogam, who became India’s first lady auditor in 1931 and in whose name the Institute of Chartered Accountants of India has instituted an award. The connection might help her establish some credential as a finance minister.