Finance Minister Nirmala Sitharaman on Wednesday assured the Lok Sabha that the central government would be taking measures to further ease inflation, which has dipped below the Reserve Bank of India’s upper tolerance level of 6%. Retail inflation had moderated to an 11-month low of 5.8% in November from 6.77% in the previous month.
“We will bring [it] down further for the sake of common people,” the Finance Minister said, while replying to a discussion on the first batch of Supplementary Demands for Grants 2022-23 in the Lok Sabha. Later, the House passed the Supplementary Demands for Grants, authorising the government to spend an additional ₹3.25 lakh crore in the financial year 2022-23.
The government is constantly watching the price situation of essential commodities, she said. Ms. Sitharaman made it clear that there was no fear of stagflation, as India is one of the fastest-growing economies with low inflation levels.
MGNREGA demand falling
She also said that the government was noticing a trend of decline in demand for employment under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme. “In rural areas, the demand for MGNREGA in the recent past is coming down,” she said. “MGNREGA is a demand-driven programme ... (and) there is a declining trend,” she added.
With regard to the fiscal deficit, the Finance Minister said that the government would be able to meet the fiscal deficit target of 6.4% of Gross Domestic Product (GDP) for the current financial year. The government is committed to the path of fiscal consolidation, she added. On non-performing assets (NPAs), Ms. Sitharaman said that it had come down drastically to 7.28% at the end of March 2022 due to various measures taken by the Central government.
With regard to the declining value of the rupee against the U.S. dollar, she said that the domestic unit was appreciating against all other currencies, adding that the rupee’s fall against the greenback is low in comparison to the fall of other currencies. Quoting a World Bank report, she said that India’s forex reserves were among the highest in the world and that this would provide a cushion against any global spillover.