FM Sitharaman’s fight against inflation: Centre, state govts collectively responsible to tame rising prices | The Financial Express

FM Sitharaman’s fight against inflation: Centre, state govts collectively responsible to tame rising prices

Evolution of handling inflation has changed drastically in the last 4-5 years, Union Finance Minister Nirmala Sitharaman

FM Sitharaman’s fight against inflation: Centre, state govts collectively responsible to tame rising prices
The Union Finance Minister further brought to light all the steps taken by the centre to offer some respite to people suffering from high prices. Image: ICRIER twitter

Evolution of handling inflation has changed drastically in the last 4-5 years, Union Finance Minister Nirmala Sitharaman said in her address at the inauguration event of Indian Council for Research on International Economic Relations (ICRIER) on ‘Taming Inflation’. Sitharaman added that handling inflation is a subset of handling the economy, and assured that centralised banks were acting in synchrony against inflation. Despite India’s global interconnectedness, Sitharaman noted that the country has managed inflation such that it has not been an entirely monetary exercise. “Inflation impact spreads due to globalisation,” Nirmala Sitharaman said in an event. 

Also read: Indian economy to be hit by global growth slowdown; govt likely to meet annual fiscal deficit target

The Finance Minister Nirmala Sitharaman also said that bringing inflation down cannot be the sole responsibility of the central government, and states play a critical role in management of prices. She said that the centre and state government are collectively responsible for reigning in rising fuel prices. She highlighted that the central government has done its part by cutting down taxes on petrol, and diesel thereby reducing fuel prices, and now the onus is on the states to follow suit. “States which have not cut state-level tax on fuel products have seen inflation that is higher than the all-India inflation level,” Sitharaman said, adding that it cannot be that inflation is handled only by the central government. 

The Union Finance Minister further brought to light all the steps taken by the centre to offer some respite to people suffering from high prices. Government’s decision to introduce export duties on critical raw materials like steel was touted by the Finance Minister as a way for the government to ensure that a right balance is struck between the domestic prices and the interest of producers.

Also Read: Petrol and Diesel Price Today, 8 Sep 2022: Fuel cost steady; Check rates in Delhi, Mumbai, Noida, other cities

On Wednesday, the Finance Minister at the U.S.-India Business Council’s Ideas India Summit 2022, said that job creation and equitable income distribution have become the government’s priorities along with inflation. She said that inflation is not a red-letter priority like the others as the central bank has been able to bring it down over the last couple of months. “Red-lettered ones would of course be jobs, equitable wealth distribution and making sure India is moving on the path of growth. In that sense, inflation is not red-lettered. I hope it doesn’t surprise many of you. We have shown in the past couple of months that we were able to bring it to a manageable level,” she said.

Earlier this month, RBI Governor Shaktikanta Das asserted that inflation in India peaked at 7.79% in April, and is now on a downward track. However, Das also iterated that it will not be a smooth slide for inflation on the way down, and there may be some bumps along the way. It may be noted that India’s August CPI inflation data will be reported on Monday, 12 September. Analysts say India’s CPI inflation may have firmed up to 6.75-6.9 per cent in August against July, as food price rise may offset easing input price pressures from petroleum products and gold.

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