Inflation is expected to moderate in the coming months thanks to fiscal and monetary measures, Economic Affairs Secretary Ajay Seth said on Monday. As commodity prices approach their peak globally, inflation is expected to moderate as supply chain effects kick in with some lag, he added.
“A number of challenges facing India have their origins outside the Indian coasts and one of them is high commodity prices…commodity prices in May moderated from There is a lag effect… there is a supply chain lag happening so we expect inflation to moderate in the coming months and for that whatever action is needed on the side budgetary, these measures have been taken and with regard to the monetary authority, RBI is also taking measures,” Seth said on the sidelines of the curtain-raising event “Celebrating the Iconic Week under the Azadi ka Amrit Mahotsav of the Ministry of Finance which will be held from June 6 to 12.
Calling it a “dynamic situation”, Seth said the government was not trying to give a piecemeal solution, but to respond in a dynamic way. “As the situation evolves, it is continually assessed and whatever is necessary is done subject to the overall constraints within which the whole system operates. So it will not be possible for me to say what the future steps, whatever the current challenges, these are being addressed dynamically,” he said.
Above RBI target range
The retail price inflation rate hit an eight-year high of 7.79% in April and stayed above the central bank’s inflation target for four months.
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PrimeThe retail price inflation rate hit an eight-year high of 7.79% in April and stayed above the central bank’s inflation target for four months.
On global headwinds affecting growth, Seth said: ‘One estimate was that the Indian economy will grow 8-8.5%, the budget assumed 7.5%… I haven’t seen any agency rating talk about a lower number than we had assumed.This is a dynamic situation…please understand that we are quite integrated into the global economy.
India is poised to become the fastest growing among the world’s major economies despite global challenges, he said. “We can overcome the current challenges as well as the challenges that will come our way in the coming years in the Amrit Kal. There are strong global headwinds that have impacted the global economy, … Despite all this , India is poised to grow the fastest among all major countries in the world. This was the position six months ago and this will be our assessment even today,” he said.
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In addition, the government is at an advanced stage of privatizing two public sector banks as announced by Finance Minister Nirmala Sitharaman, Financial Services Department Secretary Sanjay Malhotra said. In the Union budget for 2021-22, the government announced its intention to undertake the privatization of two PSBs (public sector banks) within the year and approved a policy of strategic divestment from public sector enterprises.
The government expects revenue loss of Rs 10,000-15,000 crore a year due to the recent recalibration of iron, steel and plastic tariffs, an official said, adding that the next series of GST audits will take place in the next 1-2 months.
According to the economic survey, India’s economy is expected to grow by 8-8.5% at the start of the fiscal year on April 1. The International Monetary Fund recently lowered its growth forecast to 8.2%, which is higher than 7.2% by the Reserve Bank of India.
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