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Inflation is expected to moderate in the coming months on the back of both fiscal and monetary measures, Economic Affairs Secretary Ajay Seth said Monday. With commodity prices coming off peak globally, inflation is expected to moderate as supply chain effects come in with a lag, he added.
“A number of challenges that India is facing have got its origins outside the shores of India and one of them is high commodity prices…prices of commodities in May have moderated from their peaks. There is a lag effect…supply chain lag happens so we do expect in the coming months where the inflation should be moderating and for that whatever measures were needed from the fiscal side, those measures have been taken and as far as monetary authority is concerned, RBI is also taking steps,” Seth said on the sidelines of the the curtain raiser event ‘Iconic Week Celebration under the Azadi ka Amrit Mahotsav’ of the Finance Ministry’ to be held between June 6 and 12.
Terming it as a “dynamic situation”, Seth said the government is not trying to give a piecemeal solution but responding dynamically. “As the situation evolves, it is continuously being evaluated and whatever it takes is being done subject to the overall constraints within which the entire system works. So it will not be possible for me to tell what are the future steps, whatever are the current challenges, those are being responded to in a dynamic manner,” he said.
Retail inflation rate had surged to an eight-year high of 7.79 per cent in April and has remained above the central bank’s inflation target for four months.
Retail inflation rate had surged to a eight-year high of 7.79 per cent in April and has remained 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 at 8-8.5 per cent, the budget assumed 7.5 per cent…I have not seen any rating agency talking about a number lower than what we assumed. This is a dynamic situation…please understand we are fairly integrated with the global economy.”
India is poised to become the fastest growing among large economies in the world despite global challenges,he said. “We can overcome the current challenges as well as the challenges that will come to us in the coming years in the Amrit Kal. There are strong global headwinds which have impacted the global economy, … Even despite all those, India is poised to grow the fastest among all large countries in the world. That was the position six months back and that will be our assessment even today,” he said.
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Also, the government is in advanced stage for privatisation of two public sector banks in pursuance of the announcement made by Finance Minister Nirmala Sitharaman, Department of Financial Services secretary Sanjay Malhotra said. In the Union Budget for 2021-22, the government announced its intent to take up the privatisation of two PSBs (Public Sector Banks) in the year and approved a policy of strategic disinvestment of public sector enterprises.
The government is expecting a revenue loss of Rs 10,000-15,000 crore annually due to the recent recalibration in Customs duty on iron and steel and plastic, said an official, adding the next round of GST audits will happen in next 1-2 months.
As per the Economic Survey, India’s economy is expected to grow by 8-8.5 per cent in the fiscal beginning April 1. The International Monetary Fund recently lowered its growth forecast to 8.2 per cent which is higher than 7.2 per cent by the Reserve Bank of India.
