Inflation is Moderate, Says FM Nirmala Sitharaman in her Budget 2024 Speech

According to Sitharaman, one of the main advancements the Indian economy has made is that all growth areas are exceeding forecasts with retail inflation decreasing from an average of 7.1 per cent in April–October 2022 to 5.4 per cent in the same period of 2023.

New Delhi:Finance Minister Nirmala Sitharaman, who presented the Interim Budget 2024–25 at the Parliament, said on Thursday that inflation is moderate. In her speech, she covered a span of various schemes on EV, real estate, healthcare, education, energy, auto, agriculture, FMCG, IT, defence and women empowerment.

One of the major progresses that the Indian economy has made is that every growth area is outperforming projections. "The macroeconomic environment is stable, and investments are strong. The economy is growing and inflation is moderate," she added.

In December 2023, she said that retail inflation was 'stable' and only occasionally temporarily higher due to demand-supply mismatches brought on by unfavourable weather and global shocks.

She also stated that India's retail inflation decreased from an average of 7.1 per cent in April–October 2022 to 5.4 per cent in the same period of 2023 in a written response to the Lok Sabha.

She said, "Retail inflation is currently steady and falling between the 2 per cent - 6 per cent announced tolerance range." The Indian economy's inflationary pressure has been significantly reduced by a consistent drop in core inflation, which is calculated after eliminating volatile goods like food and gasoline from retail inflation, she had remarked.

In October 2023, the core inflation rate was 4.3 per cent, down from 5.1 per cent in April 2023. The minister said that since the inflation tolerance band was announced in 2016, retail inflation in India has largely remained within tolerable bounds.

She continued, "Effective demand stabilisation measures by the Reserve Bank of India and proactive supply-side initiatives by the government have helped resolve the demand-supply mismatches and rein in inflation."

The Pradhan Mantri Garib Kalyan Anna Yojana, which offers free food grains to about 81.35 crore recipients, has been extended for five years, starting on January 1, 2024, to provide food security for the poor.

Hailing the centre's policies, she said that the BJP-led government has also made periodic open market releases, eased imports of essential food items through trade policy measures, prevented hoarding by imposing/revising stock limits, and channelled supplies through designated retail outlets to curb inflation, she added.