Taming inflation our top priority, says FM Nirmala Sitharaman

Growth mantra

♦ Green shoots of private capex visible

♦ Focus on Aatmanirbhar Bharat

♦ But essential imports will not be stopped

New Delhi: Finance Minister Nirmala Sitharaman on Friday said India’s economic growth in the first quarter of this fiscal should be good and that the government’s priority is to tame inflation, which has touched a 15-month high.

Addressing business leaders in the national capital, she said that green shoots of private capital expenditure upcycle can be palpably felt as the government’s enhanced capital expenditure is now crowding in private sector investments.

While mentioning about the key priorities of the government, Sitharaman also stressed that the focus is on Aatmanirbhar Bharat (self-reliant India) but essential imports will not be stopped. She also emphasised on the need for diversification of supply chains at the earliest to avoid shocks.

Noting that India is the fastest growing major economy, she said that in another few days, the GDP numbers for the first quarter of 2023-24 will be released. “As things stand, nobody has a clue. But everybody feels that yes, the first quarter did go on well, so the numbers should be good,” Sitharaman said while speaking at the B20 Summit India 2023, being organised by industry body CII.

The National Statistical Office (NSO) is scheduled to release the Gross Domestic Product (GDP) data for April-June quarter on August 31. She said there is a lot of interest on what the US Federal Reserve is going to say from Jackson Hole. “All of us are wondering how that is going to come out because its spill over is also something which we notice,” she said.

Investors are awaiting cues on the US Federal Reserve’s monetary policy from Chairman Jerome Powell’s speech at the Jackson Hole Symposium on Friday. According to her, the key priority for economic growth “is taming inflation” because persistently high inflation will weaken demand. “It’s basic economics. I’m not saying anything new. Equally, elevated interest rates for considerable time can come in the way of economic recovery,” the Finance Minister said and added that the tendency to use interest rates as the only solution for dealing with inflation has its own downside.