Nirmala Sitharaman, the minister of finance, stated that states have a crucial role in managing prices and that bringing down inflation cannot be the only responsibility of the federal government. She argued that controlling inflation was a shared federal and state responsibility, particularly with regard to gasoline prices. Sitharaman claimed that the Center had twice lowered fuel taxes, which had decreased prices, but that it is now up to the states to do the same.
She expressed concern about the fact that some states’ inflation rates were higher than the national average. She emphasized that because some governments haven’t reduced the levy on gasoline items, inflation is higher. It cannot be that the only entity in charge of managing inflation is the Center and that when the states don’t do enough, a portion of India suffers from the lack of a respite from the pressure of inflation.
Since they make up the majority of the index, she claimed that the movement of food grains and other related commodities had an impact on total pricing.
The government has taken action to provide relief to those who are suffering from high costs, according to Sitharaman, who was speaking at an event on managing inflation organized by ICRIER. She claimed that in order to ensure a proper balance between domestic prices and the interests of manufacturers, the government imposed export taxes on key raw resources like steel. According to the finance minister, globalization has an impact on inflation spreads, and central banks around the world are collaborating to control it.
Nirmala Sitharaman stated that this is where she gives credit to the prime minister’s statesmanship for ensuring that we maintained relations with all nations while yet managing to obtain Russian fuel, much like Japan is currently doing and other nations are doing. Sitharaman made the point that reducing inflation is a complex endeavor that cannot be anticipated to be fully accomplished by monetary policy alone.
She advocated for better coordination between India’s fiscal and monetary policies. She stated, “I would say that India’s inflation management, the term taming inflation or the word keeping it within the tolerance level, is an exercise of so many different actions and the majority of which is outside of the monetary policy offered in today’s circumstances.
Retail inflation in India reached a peak in April at 7.8% and has subsequently dropped, with the most recent inflation reading coming in July at 6.7%. Inflation is anticipated to ease in the second half of the current fiscal year, with the total headline number slipping within the tolerance band in Q4.
According to RBI Governor Shaktikanta Das. At the USIBC event on Wednesday, Sitharaman declared that the government’s top priorities were creating jobs and distributing money fairly and that inflation was no longer a “red-lettered” word.
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