India’s macros strong; govt not in denial on inflation: FM

Claiming the government is not in denial mode on inflation, finance minister Nirmala Sitharaman has said India’s macro-economic fundamentals are strong when compared with the peer groups and the developed economies.

Replying to short discussion on the rising prices of essential items in the Rajya Sabha, Sitharaman said, “Indian economy compared to the peer groups and developed economies is much better. It does not mean we are running away. No one is in denial mode on inflation. Looking at the peer group and developed economies, India's macro fundamentals are strong.”

During the debate, the Trinamool Congress MPs staged a walkout. Commerce minister Piyush Goyal said the TMC stands exposed as the party was not interested on debate on price rise in the first place.

Since the beginning of this year, inflation rate started rising in the country, largely on account of the rising global commodity prices. The Russian invasion of Ukraine, which began on 24 February, only added fuel to the fire.

India’s retail inflation touched a peak of 7.79% in April. Both the central government and the Reserve Bank got into action, with the RBI raising the policy lending rates in an off-cycle meeting of the monetary policy committee (MPC). The government also took a slew of measures, including a reduction in excise duty on petrol and diesel, along with banning of wheat exports.

The rising interest rates, however, has led to concerns on the GDP growth. But the FM has ruled out both recession and stagflation in the economy.

Sitharaman, during a debate on the price rise in the Lok Sabha on Monday, said, “Even as the global economic growth is being re-estimated and re-assessed, each time India remains at the highest. The GDP of the US fell 0.9% in the second quarter, following a 1.6% decline in the first quarter, marking the start of an unofficial recession as they call it. There is no question of India getting into recession or stagflation.”