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Thursday, December 15, 2022

Aiming for lower inflation, 6.4% fiscal deficit target: Sitharaman

Aiming for lower inflation, 6.4% fiscal deficit target: Sitharaman

 

Delhi, India: On Wednesday, Finance Minister Nirmala Sitharaman stated that the government would like to further reduce inflation and that the Central Government would be able to achieve its fiscal deficit goal of 6.4% of GDP this year.


The FM stated that the government was closely monitoring the price situation and listed some of the steps that had been taken in response to the Lok Sabha debate on the supplementary demand for grants. I am pleased to report that we have not only been acting but also not talking as a result of these policies and the measures taken. The most recent CPI data support this. Expansion has now descended. It is now within the RBI's acceptable range.


She read out the most recent estimates for wholesale inflation, which were 5.9%, the lowest level in 21 months: " Inflation management and control are two terms for this. Sitharaman argued that the economy was in much better shape, citing a recent World Bank report, double-digit inflation during the UPA era, a recent moderation in price increases, and the banking system being stronger now. She also denied that the rupee was under pressure, maintaining that several other currencies had lost more value against the dollar.


She responded to Adhir Ranjan Choudhury's assertions that stagflation was occurring. Our economy is growing at the fastest rate. We have lower inflation, or inflation within the forbearance limit, making us the fastest-growing economy.


Sitharaman stated that during the remaining portion of the fiscal year, another Rs 10,000 crore may be provided to railways for building infrastructure, exceeding the Rs 12,000 crore in the initial batch of supplementary grant demand, despite indicating that there was revenue buoyancy and that additional demand for funds will depend on the requirement.


The increased spending on food, fertilizer, and fuel subsidies was largely to blame for the Centre's request for Parliamentary approval of an additional Rs 3.3 lakh crore in cash outlays.


The FM stated that the UPA government's supplementary demand for grants added up to 20% of Budget Estimates (BE) during the global financial crisis, in response to observations made by some members regarding the most recent demand. She stated that the current supplementary demand is 8% of what was proposed to be spent in the budget, and that there could be one more during this financial year. In 2020-21, the pandemic year, the Centre's supplementary demand was somewhere around 19% of the BE.


The minister responded to criticism regarding the fertilizer subsidy by stating that the Rs 1,09,000 crore will be used for both imported and domestically produced varieties. She also stated that there is less demand for MGNREGA jobs, which is why an additional Rs 16,000 crore has been provided.

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