From incentives to free food – FM lists out steps taken to curb inflation
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman, during the Post-Budget Stakeholder Interaction in Jaipur today, said the Union Budget 2023-24 has listed out several steps taken by the government to contain inflation in the country. "We're giving incentives to farmers for cultivation of pulses. Decreased import duty on pulses. Import of edible oil has been made almost tax-free. Free foodgrains to 80 crore people since Covid-19."
On an increase in inflation in January 2023 as compared to December 2022, CEA V. Anantha Nageswaran said it increased due to the base effect coming from a sudden outburst of the heat wave in March last year when the stocks got depleted. “Therefore we see this as a temporary phenomenon. Secondly, we have seen that inflation passthrough coming from imported prices, whether it is metals, minerals, crude oil or edible oil passing onto CPI, has got through already. Therefore, we don’t see the second round coming from wholesale prices.”
India’s retail inflation jumped to 6.52% in January 2023 from 5.72% in December 2022, breaching the RBI’s upper tolerance limit of 6%.
He said as the RBI has projected in its inflation forecast for 2023-24, seeing the inflation rate coming down gradually towards the 5% level by the second half of the next financial year 2023-24, it still remains the most likely prospect for inflation.
On the rise in home loan rates due to the subsequent increase in repo rate, the FM said in the Union Budget 2023-24, there is something for each section of society. “For the poor, 66% increase in allotment in Aawas Yojana. For middle-class, affordable homes i.e. ₹45,000 interest subvention. When interest rates are down, the middle-class profit on fixed deposits and senior citizen deposits also go down due to low interest. When the interest rate goes up, their interest will also increase, which is also their source of income."
On the crypto regulations, the FM said it is on the Centre’s agenda under the G20 because it thinks tech-driven crypto asset creation, and buying and selling of assets in the crypto world, will have to have international co-operation because they (crypto exchanges) can be in India but operate anywhere else.
“On youngsters investing in crypto, both the regulators and also the national securities depositaries have done campaigns to alert people that it is a high-risk area and they should be careful. As regards the bill, the talks are on," she said.
On the question of the storage of storage tech opportunities in India, the FM said in the last budget itself, she had mentioned the PLI extension for storage and advanced chemistry -- batteries and so on. “So that has been an emphasis since the last budget. In this budget, for the renewable energy sector, we have given enough incentives and we are looking at how it's developing.”
She said R&D is an area in which the national research fund has a got huge amount of money. “Because we consolidated all the otherwise widely scattered government funds waiting for research, and that will be used for all such purposes through departments of science and technology."
On states doling out sops, the FM said: “If the financial position of a state is good and it is able to fund a scheme through the budget, then there's no problem. But if the financial position of a state is not good & still it is running the schemes and is shifting the burden onto others, then there's a problem.”
Attacking the opposition, she said the Congress should not speak on corruption at all and then bring in the angle of vindictiveness. “It's a shame. Congress governments, one after the other from the first one, have gotten out of power only on issues related to corruption.
Investigative agencies do their homework and only when they have the necessary prima facie evidence, go & investigate...It's strange that a party, whose past president and the one before are out their bail in corruption related matters, is talking about corruption.”