- Sitharaman also said the government will review the functioning of the National Investment and Infrastructure Fund to make it more robust
Bengaluru: Finance minister Nirmala Sitharaman on Wednesday said economic growth remains the government’s priority as inflation has been brought down to a manageable level.
The statement comes at a time when India is facing a tighter monetary policy regime amid inflationary pressures, and private investment is yet to pick pace.
Job creation and equitable distribution of wealth, and ensuring that India is moving on the path of growth are the top red-lettered priorities for the government, Sitharaman said at the US-India Business Council’s India Ideas Summit on Wednesday.
“Some, of course, are red-lettered (priorities), some may not be… In that sense inflation is not red-lettered. I hope it doesn’t surprise many of you. We have shown that in the past couple of months that we were able to bring it to a manageable level,” she said.
India’s retail inflation eased to a five-month low of 6.71% in July, falling below the 7% mark for the second straight month. However, it was over the Reserve Bank of India’s upper tolerance band of 6% for the seventh month in a row. The wholesale price index-based inflation also moderated to a five-month low in July.
The RBI- led monetary policy committee hiked the repo rate by 50 basis points in August, increasing rates for the third time in a row, taking the policy rate to the pre-pandemic levels of 5.4%.
“India doesn’t have the luxury of sequencing priorities, and efforts to tackle them must take place simultaneously,” she noted.
Sitharaman said that the Reserve Bank of India is confident of handling the monetary policy without any major blips.
“We are confident that the steps that the US Fed may take or the European Central Bank may take, the Indian central bank is fairly clued in into the developments which are happening all around and they are confident of handling the Indian monetary policy without major blips or rise and fall,” said Sitharaman.
Central banks of major economies are hiking policy rates amid record high inflation levels, led by the supply chain disruption due to the Russia-Ukraine war.
India’s national accounts data released last week showed that the economy grew below expectations at a four quarter high of 13.5% in the April-June period, largely led by rebound in the services sector.
The minister further said that the government will review the functioning of the National Investment and Infrastructure Fund (NIIF) to make it more robust.
She said the new Data Privacy Bill will be out soon after consultations, which will address stakeholders’ concerns. The (IT) Minister has been working very diligently and has assured us the new bill will be ready soon and address concerns we have had in the past, she added.
Sitharaman said that India’s digital revolution offered investment opportunities for the United States. “India’s Open Network for Digital Commerce has revolutionised the retail and manufacturing sector,” she said.
With India set to take over the G20 Presidency from December 1 this year to November 20, 2023, Sitharaman said that it comes at a very challenging time.
“We will be taking over the G-20 chair at a very challenging time, but it is equally heartwarming that Indonesia, India and South Africa are all emerging markets. This is important because emerging markets are showing potential to lead the global economy in the next 50-60 years,” said Sitharaman. She added that it is the right time to focus on the emerging economies, address issues of global concern through these economies. Emerging economies are going to be the center of focus,” she added.
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