Budget 2023 To Address Problems Of High Inflation, Slowing Growth

Finance Minister Nirmala Sitharaman has said the Budget 2023 will be carefully structured to address the dual challenges of high inflation and slowing growth. She also said the Indian economy is expected to grow 7 percent in the current financial year 2022-23.

“Specifics (of the next Budget) may be difficult at this stage because it’s a bit too early. But broadly, the growth priorities will be kept absolutely on the top. Even as I speak about the concerns that inflation brings before me. So, inflation concerns will have to be addressed. But then how would you manage growth would be the natural question,” according to the report quoting Sitharaman. She said this in Washington, where she is scheduled to attend the annual conferences of the World Bank and the International Monetary Fund (IMF).

The Budget is usually presented in Parliament on February 1 every year. Regarding this, preliminary discussions have started this week on spending by different departments.

According to the latest data, India’s retail inflation accelerated to 7.41 percent in September, compared with 7 percent in the previous month, according to official data. September has registered a five-month high level amid a surge in food prices. Inflation in rural areas in September 2022 rose to 7.56 percent, while that in urban areas accelerated to 7.27 percent. In September 2021, retail inflation stood at 4.35 percent.

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Meanwhile, the Index of Industrial Production (IIP) witnessed a fall of 0.8 percent in August as compared with a growth of 2.4 percent in July.

On Tuesday, the International Monetary Fund (IMF) slashed its estimate for India’s GDP growth in the current financial year started April by 60 basis points to 6.8 percent from a previously expected 7.4 percent, on account of lower-than-expected growth in April-June and weak external demand. The figure for FY24 was left unchanged at 6.1 percent.

On India’s economic performance, Sitharaman on Thursday said pre-pandemic efforts included making the Indian economy robust with the infrastructure of not just roads but also digital infrastructure-ready and financial inclusion so that everybody has access to a bank account. All this came in handy during the COVID-19 pandemic.

Sitharaman has also held bilateral meetings with her counterparts from Japan, Saudi Arabia, the Netherlands, and South Korea as part of the Indian efforts to strengthen its economic ties with major countries of the world.

Sitharaman and her US counterpart Treasury Secretary Janet Yellen have also discussed a range of issues, including bilateral relationships, the global situation as well as India’s upcoming G-20 Presidency. The two leaders discussed the current global macroeconomic situation among other issues of mutual interest.

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