Despite the economic uncertainties caused by the war between Russia and Ukraine, which is also affecting global supply chains, Kumar said that by all accounts, India will remain the fastest growing economy in the world.
“Given all the reforms we’ve done in the last seven years, and given that we’re seeing the end of the COVID-19 pandemic hopefully, and the 7.8 percent growth rate that we’re going to get this year (2022-23 ), a very solid foundation is now being laid for a rapid increase in economic growth in the coming years,” Kumar told PTI in an interview.
Asia’s third-largest economy is projected to grow 8.9 percent in 2021-22, according to recent government data. The Reserve Bank of India (RBI) set the economic growth rate for 2022-23 at 7.8 percent.
“So, I think India is on the cusp of a great economic recovery and economic growth,” Kumar said, although he acknowledged that due to the war between Russia and Ukraine, India’s GDP growth projection could be revised.
“But even then, India will still be the fastest growing economy and all other economic parameters are quite within range,” he said.
Russia began its military offensive against Ukraine on February 24. Western nations, including the US, imposed significant economic and other sanctions on Russia after the offensive.
On rising inflation, Vice President Niti Aayog said that RBI is keeping a close eye as per its mandate.
“I am sure the RBI has a good handle on it (inflation) and will take necessary action when necessary,” he said.
Retail inflation hit an eight-month high of 6.07% in February, holding above the RBI’s comfort level for the second consecutive month, while wholesale price-based inflation soared to 13.11% due to tightening. of crude oil and non-food products. item prices.
The RBI keeps a close eye on CPI inflation as it decides its bi-monthly monetary policy.
The RBI’s Monetary Policy Committee (MPC) has been mandated to keep annual inflation at 4 percent until March 31, 2026, with an upper tolerance of 6 percent and a lower tolerance of 2 percent.
Regarding concerns about the possible risk of stagflation, Kumar said that the Indian economy is projected to grow 7.8 percent in the current fiscal year and this does not come close to the definition of stagflation.
“I think this has been exaggerated, because when you talk about stagflation, we talk about growth rates that are way below your potential growth rate or output, which is not true at this time,” he stressed.
Stagflation is defined as a situation where inflation and unemployment are high and demand also remains stagnant in the economy.
On the fulfillment by the government of the goal of raising $Rs 88 crore from asset monetization in the 2021-22 fiscal year ending March 31, Kumar said: “I heard that this (target) will be achieved or if not, (then we will be) very close to the target. We have a number of things in the pipeline and initiatives have been taken by various ministries, so I think this will be on the right track.”
Last year, Finance Minister Nirmala Sitharaman had announced a $6 lakh crore-National Monetization Pipeline (NMP) over a four-year period that will seek to unlock the value of infrastructure assets in sectors ranging from energy to roads and railways.
Niti Aayog, in consultation with line ministries of infrastructure, has prepared the report on NMP.
Regarding the high prices of gasoline and diesel, Kumar said that given the global situation, fuel prices are increasing around the world.
“In the past, the government has taken steps to reduce the tax burden. And I think now is the time for states to come forward if they feel it is necessary to do so,” he said.
In any case, Kumar said, the government is closely monitoring the prices of all basic goods, including fuel, and will take necessary measures.
Gasoline and diesel rates are increasing and vary from state to state depending on the incidence of local taxes. PTI BKS RAM ANU BAL
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