Finance Minister Nirmala Sitharaman said that the pace of improvement in the economy is more than expected. The reason for this improvement is not only the withdrawal of the earlier suppressed demand but also the arrival of new demand. She said that this improvement in the economy will be sustainable. The budget for the next financial year will be presented in the next two months. The Reserve Bank of India and the government are working together to improve the economy as soon as possible.
The Reserve Bank of India kept policy rates unchanged on Friday as inflation remained high. On this, the Finance Minister said that this rise in inflation is seasonal and she is not worried about it.
At the ‘HT Leadership Summit’ conference, the Finance Minister said that ‘inflation, especially the rise in prices of food items, will moderate. I don’t see it as inflation, especially on food items, where it remains above, it will come down there. ‘ The decline in the economy stabilized at 7.5 per cent in the July-September quarter, which is slightly better than what was expected. Some experts believe that the reason for this is the increased demand and suppressed demand in the market during the lockdown period. They believe that this improvement in the economy will fall in reverse after the festive season is over.
However, Sitharaman said that the Goods and Services Tax (GST) collection in two months stood at Rs 1 lakh crore. At the same time, expansion plans of companies working in basic sectors show that there is additional demand in the economy.
She said, ‘I cannot surely claim that the GST collection of more than one lakh crore rupees in the last two months is only due to suppressed demand and festive demand, because I have also discussed with many industrialists who are working on the plans to expand their capacity. Sitharaman stressed, ‘Basic industries like cement, iron and steel are expanding. This shows that additional demand has arisen. ‘
It cannot just be a return to suppressed demand or increased shopping due to the festival. This seems to be a permanent demand. The Reserve Bank of India also announced its bi-monthly monetary policy on Friday.
Meanwhile, the central bank has forecast the economy to shrink by 7.5 per cent in the current financial year. This reflects a better than expected October contraction of 9.5 per cent.