Finance Minister Nirmala Sitharaman, pointing at bad loans in state-run banks when the Congress-led United Progressive Alliance (UPA) was in power, said she holds the Manmohan Singh-Raghuram Rajan combination responsible for subjecting public sector banks (PSBs) to their "worst phase".
"I have no reason to doubt that Rajan feels for every word of what he is saying. And I'm here today, giving him his due respect, but also placing the fact before you that Indian public sector banks did not have the worst phase than when the combination of Singh and Rajan, as Prime Minister and the Governor of the Reserve Bank of India (RBI), had. At that time, none of us knew about it," the Finance Minister said at the Columbia University's School of International and Public Affairs on Tuesday.
Bad loans of PSBs rose from Rs. 9,190 crore in 2011-2012 to Rs. 2.16 lakh crore in 2013-2014, according to the RBI. The National Democratic Alliance (NDA) government came to power in May 2014.
Ms Sitharaman has been firefighting criticisms over a slowdown in the economy that threatens to burn key sectors from manufacturing to finance. She announced a corporate tax cut in September aimed at boosting the economy at the risk of widening India's fiscal deficit, or a shortfall in the government's income compared with its spending.
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