Finance Minister Nirmala Sitharaman has accused the Manmohan Singh-Raghuram Rajan combination for the present economic crisis. Pointing at bad loans in state-run banks when the Congress-led United Progressive Alliance was in power, Sitharaman held the former PM and ex RBI Governor responsible for subjecting public sector banks 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 a worst phase than when the combination of Singh and Rajan, as Prime Minister and the Governor of the Reserve Bank of India, 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.

Ms Sitharaman took a leaf out of the BJP’s attacking set pieces, often used in election speeches, to criticise the two economists. “It was in Rajan’s time as Governor of the Reserve Bank that loans were given just based on phone calls from crony leaders, and public sector banks in India till today are depending on the government’s equity infusion to get out of that mire,” she said, drawing laughter from the audience.

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 government came to power in May 2014.

Sitharaman has been busy answering questions over a slowdown in the economy, which is affecting key sectors from manufacturing to finance. She had announced a corporate tax cut in September aimed at boosting the economy but after initial boom, the move did not pay off.

Both, the former Prime Minister Manmohan Singh and ex RBI Governor Raghuram Rajan, are fierce critics of the economic policies of the government led by Prime Minister Narendra Modi. They had raised their voice over demonetisation, saying that the move broke the back of the cash-dependent informal economy.

“…I do respect Raghuram Rajan as a great scholar who chose to be in the central bank in India at a time when the Indian economy was all buoyant,” Ms Sitharaman said at the lecture at the university in New York City, organised by the Deepak and Neera Raj Centre on Indian Economic Policies. Former chairman of the government’s think tank NITI Aayog, Arvind Panagariya; economist Jagdish Bhagwati, and India’s Consul General in New York, Sandeep Chakravorty, attended the event.