Sitharaman says Centre, states working with them towards recovery

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Sitharaman says Centre, states working with them towards recovery

Minister says that growth momentum will continue in the medium-term. She says that citizens are working with Centre and states towards recovery. This cooperation will put India on a growth trajectory.

The Union Minister, Shrimi Choudhary and Arup Roychoudhury, showed confidence in the robustness of the Indian economy, according to the Business Standard spokesman, Shrimi Choudhary and Arup Roychoudhury. The FM said that the government was forced to present five mini budgets in 2020 despite the upheaval caused by the Pandemic. She said that the government has turned to a public capital expenditure programme to revive demand during the tough period.

Since the government had adopted that route for economic revival during the epidemic, spending on capital assets was chosen, according to the FM. Capital expenditure is the money spent by the government on the development of machinery, equipment, building, health facilities, education, etc.

The Centre's capex outlay is estimated to be 7.5 trillion rupees in FY 23. 1 trillion rupees will go to states as a long-term interest-free loan for their capex needs, according to the FM.

In 2019 -- 20 the government's capital expenditure through budget was Rs 3.35 trillion.

The entire 1 trillion rupees could be given to states in the July-September quarter. The rules for distributing the loan had been framed, according to the FM. Many states were ready to submit their projects - both greenfield and brownfield -- for evaluation.

Sitharaman was confident that the amount would be picked up by states before the end of the second quarter.

The FM tried to assuade the concerns around the fiscal deficit, saying that they are under control despite continued external headwinds.

Revenue buoyancy provides a bit of comfort and will continue to source materials from specific places to cut cost. She says there is strong centre-state synergy to continue.

FM Sitharaman said that inflation is nowhere close to what other countries are seeing, despite the fact that inflation is giving a tough time for policymakers. She conceded that it is burdensome for people, especially those with low income.

Retail inflation went up from 3.4% in FY 19 to 4.8% in FY 20 and 6.2% in FY 21 before easing moderately to 5.5% in FY 22.

Retail inflation for May 2022 was down from the 8-year high of the previous month to settle at 7.04 per cent. The Reserve Bank of India expects inflation to be above the 6 per cent mark until the October-December quarter.

The bank privatisation plans are almost ready and the government will bring amendments to the Banking Regulation Act soon, according to the FM. She added that while the Centre would continue to own some banks, it could do so completely in the banks it decides to exit.

There has been no official confirmation from the government, Central Bank of India and Indian Overseas Bank.

The FM stated that the government was aware of Covid-affected revenue growth after the recent GST Council meeting. The growth percentages can't be measured in those two years. She said that the government is yet to take a call on rate rejig.

The delays and cost overruns are a problem that hamper infrastructure projects in India. With its ambitious capex plans hanging in the balance, will the government be able to overcome such challenges and spur the economy on?