India taking steps to curb rising inflation: FM Nirmala Sitharaman

New Delhi: India’s inflation by a portion is above the “tolerance limit”, and the government is taking all the necessary steps to control it, Indian Finance Minister Nirmala Sitharaman said on Saturday.

The country’s annual retail inflation for March took a hike at the slowest pace in nearly 15 months and was beneath the Reserve Bank of India’s upper tolerance level for the first time this year.

“Because we took a very calibrated approach, today we have an inflation which is slightly above the tolerance limit, but which is constantly being worked at so it can be brought down,” she said.

India’s newest retail inflation fell within the Central Bank’s target range of 2%-6% in March after successive 2 months of consumer price gains that were above 6%. Although prices have mitigated since the previous year’s high of 7.79% in April 2022, prompting the regulatory body to take on a series of interest rate increases that caused a slower demand in Asia’s third largest economy.

By the latest numbers, RBI is to take a move to keep its policy unchanged to assess the cumulative impact of 250 bps in total rate increases since May a year back.

Is Rupee doing any better?

Nirmala Sitharaman said that the Indian economy has just emerged from the pandemic without any losses due to the government’s ability to frame balanced policymaking. This has caused the Indian rupee to be stable and the way it is being managed is giving recognition to the currency with at least 19 countries allowing rupee transactions so that they can be traded, she said.

India’s efforts to internationalise the rupee are not just to bring the dollar’s demand down but also to offer its currency as a substitute for trade with countries that are facing a shortage of dollars.

“If you can do a payment in rupee abroad, the government has done a lot of background work to get that done,” Sitharaman said. “It wouldn’t have been possible otherwise.”

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