Will take necessary steps to boost growth, says FM
THE FM ALLAYED FEARS THAT THE RBI WOULD SUCK OUT LIQUIDITY TO TAME INFLATION
NEW DELHI: Union finance minister Nirmala Sitharaman on Thursday told Indian industry that the government will take all “necessary steps” to boost growth that will “eventually” remove poverty, and allayed fears that the Reserve Bank of India (RBI) would suck out liquidity to tame inflation. The remark came on a day as data showed retail inflation to have eased marginally in July after remaining above the notified cap of 6% for two straight months.
In the context of a specific query raised at the Confederation of Indian Industry’s (CII) annual session by Kotak Mahindra Bank chief Uday Kotak— whether the currently high inflation is transitory or structural— she said: “I’m not looking at growth versus inflation. It’s not growth versus inflation, we shall attend to inflation, keep it contained, take all the necessary steps, but never forget that growth is what is going to make the difference to the economy’s revival and growth is what is eventually going to remove poverty and bring in a certain level playing field for all the Indian citizens.”
She said that growth would be pushed by both RBI and the finance ministry. India’s retail inflation in July was 5.59%. India’s official CPI inflation target is 4% with the upper tolerance limit of 6% cent and the lower tolerance limit of 2% cent.
“One thing on which most of the industry normally worries about is, how does the ministry and the RBI work together? I take it as a point to mention here that you would have observed that in Modi 2.0 particularly, and even earlier, the relationship with RBI has been one of those in which we are working like partners to address the issues of the economy,” she said.
“Even now, even during pandemic, the RBI and its monetary policy has been keeping the momentum in the right direction and the fiscal side of things are being taken care of by the ministry of finance. That coordination continues. And that partly, therefore, addresses Uday Kotak’s comments, what happens to Inflation, what happens to growth..,” she added.
On a question, what she would like to achieve in the 75th year of Independence, Sithraman said reducing India’s dependence on imported fossil fuels by achieving increased selfreliance in renewable energy sector is one of the priorities. This is one thing on which I would like the industry to be very proactive, she said.
India imports more than 80% crude oil it processes and pays in dollar. Rising oil prices is one of the major concerns for the government as it has inflationary impact. India’s crude oil import bill soared nearly threefold in the first quarter of the fiscal (Q1FY22) due to a sharp rise in global oil prices.