Page 54 - The Indian EYE 081922

The Indian Eye
NATION AUGUST 19, 2022 54

As Reserve Bank tries to tame inflation,

finance minister claims economy is fine

Wholesale inflation was at 15.18 per cent in June; The Wholesale Price Index (WPI) based

inflation has been in the double-digit for 15 months in a row now

OUR BUREAU the fastest growing economy in the
assessment of international agencies.
New Delhi
The Finance Minister empha-
he monetary policy committee sized that due to the measures taken
of the Reserve Bank of India by the government, India is in a much
Thas raised the repo rate by 50 better position than most countries.
basis points to 5.40 per cent in order She said prices of edible oils have
to contain the persistently high infla- corrected sharply following steps tak-
tion. en by the government.
Highlighting India’s robust eco-
Raising interest typically sup- nomic health despite the COVID
pandemic and geo-political situation,
press demand in the economy, Sitharaman said there is no question
thereby helping inflation to de- of India getting into stagflation or re-
cession like other major economies
cline. The three-day monetary of the world.
Referring to a survey, Sithara-
policy committee meeting com- man said there is zero possibility of
menced on Wednesday. India getting into recession.
Union Finance Minister Nirmala Sitharaman speaks in Rajya Sabha during the Monsoon Sitharaman said the Gross Do-
Today’s hike takes the repo rate Session of Parliament, in New Delhi on Tuesday. (ANI Photo/ SansadTV) mestic Product (GDP) of the US fell
above pre-pandemic levels of 5.15 0.9 per cent in the second quarter
per cent. following a 1.6 per cent decline in
In line with the global trend of the first quarter. “They start calling
monetary policy tightening to cool it an unofficial recession. There is no
off inflation, the RBI has so far hiked question of India getting into reces-
the key repo rates -- the rate at which sion or stagflation,” said the Minister.
the central bank of a country lends But Congress party leader Ra-
money to commercial banks -- by 140 hul Gandhi on Friday made a sharp
basis points. attack on finance minister Nirmala
Raising interest typically sup- Sitharaman for her handling of the
presses demand in the economy, Indian economy. In a press confer-
thereby helping inflation to decline. ence at the party’s headquarters in
The committee also decided to re- Delhi, Gandhi said that he did not
main focused on the “withdrawal of think that the Union finance minis-
accommodation” stance to ensure ter Nirmala Sitharaman has “any un-
that inflation remains within the tar- derstanding of what is happing in the
get going forward while supporting country”. Workers and leaders of the
growth. “The US dollar index soared Congress today congregated at the
to a two-decade high in July. Both All-India Congress Committee head-
advanced economies (AEs) and quarters here as part of a planned
emerging market economies (EMEs) nationwide protest against inflation,
witnessed the weakening of their cur- Reserve Bank of India (RBI) Governor Shaktikanta Das (ANI Photo) hike in GST on essential items and
rencies against the US dollar. EMEs unemployment.
are experiencing capital outflows and Addressing a press conference
reserve losses which are exacerbating per cent in June, marginally low- per cent and Q4 at 4 per cent with before he joined MPs in a dharna
risks to their growth and financial er than the 15.88 per cent report- risks broadly balanced, RBI Gover- outside Parliament, Gandhi said:
stability,” the central bank said. ed during the previous month. The nor Shaktikanta Das said while an- “I think the macroeconomic funda-
Notably, India’s retail inflation Wholesale Price Index (WPI) based nouncing the outcomes of the policy mentals that she (Nirmala Sithara-
has been over the Reserve Bank of inflation has been in the double-digit meeting. man) is talking about is something
India’s upper tolerance band of 6 per for 15 months in a row now. But, emphasizing on the Cen- else. I don’t think the Finance Min-
cent for the sixth consecutive month The real gross domestic product tre’s measures to tide over the global ister has any understanding of what
in a row in June. Retail inflation was growth projection for 2022-23 is re- economic slowdown, Union Finance is going on in the economy of India,
at 7.01 per cent in June. tained at 7.2 per cent with Q1 at 16.2 Minister Nirmala Sitharaman on zero understanding. She is there as a
Wholesale inflation was at 15.18 per cent, Q2 at 6.2 per cent, Q3 at 4.1 Monday said India continues to be mouthpiece.”

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