Support the RBI in taking the necessary actions to keep inflation within the anticipated range: FM Nirmala Sitharaman

RBI is keeping an eye on the Indian economy and making decisions as needed, remarked FM Nirmala Sitharaman

In a post-budget industry event on Monday in Jaipur, Finance Minister Nirmala Sitharaman stated that the Central Bank of India (RBI) will take the necessary actions to maintain inflation within “expected limits.”

“In emerging markets, the situation is unique to each of the countries. In that I think, RBI is watching the Indian economy and taking a call as and when it is required,” Sitharaman stated.

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According to official data released earlier this month, India’s consumer price index (CPI), also known as retail inflation, increased to a three-month high in January and returned to being above the RBI’s upper tolerance range of 6% after a two-month hiatus. Core inflation, which excludes food and fuel, stayed over 6% in January at 6.2%.

Since January 2022, retail inflation has consistently exceeded the Reserve Bank of India’s upper tolerance limit of 6%, with the exception of November and December 2022. Consumer Price Index (CPI)-based retail inflation was 5.72 percent in December and 6.0 percent in January 2022. The previous peak occurred in October at 6.77%.

Retail inflation is expected to be 6.5% instead of 6.7% in FY23, and 5.3% in FY24, according to the central bank’s projections. “The picture for the world economy is less bleak than it was a few months ago; growth prospects in major economies have improved, and inflation is declining, though it is still far above the target in key economies. Core inflation has not changed.As of January 27, 2023, non-food credit growth was up 16.7% from the prior corresponding period. In the February policy meeting, RBI Governor Shaktikanta Das stated, “We must continue to be steadfast in our efforts to bring the CPI down.