JAIPUR: The Reserve Bank of India (RBI) will take adequate steps to tackle inflation within "expected limits,' Finance Minister Nirmala Sitharaman said in a post budget industry event in Jaipur on February 20.
"In emerging markets, the state of affairs is unique to each of the countries. In that I think, Reserve Bank is watching the Indian economy and taking a call as and when it is required," the finance minister said.
India’s consumer price index (CPI) or retail inflation scaled up to a 3 month high in January, reverting to over the central banks's upper tolerance band of 6 percent after a gap of two months, led by a spike in food prices and elevated prices in the non-food segment, official data showed earlier this month. Core inflation, which is non-food, non-fuel inflation remained over the 6 percent mark at 6.2 percent in January.
Since January 2022, retail inflation has consistently exceeded the Reserve Bank of India's upper tolerance limit of 6 percent, with the exception of November and December 2022. Consumer Price Index (CPI)-based retail inflation was 5.72 percent in December and 6.0 percent in January 2022. The previous peak occurred in October at 6.77 percent.
Retail inflation is expected to be 6.5 percent instead of 6.7 percent in FY23, and 5.3 percent in FY24, according to the central bank's projections. The RBI bases its monetary policy mostly on retail inflation.
"The picture for the world economy is less bleak than it was a few months ago; growth prospects in major economies have improved, and inflation is declining, though it is still far above the target in key economies. Core inflation has not changed. As of January 27, 2023, non-food credit growth was up 16.7 percent from the prior corresponding period. In the February policy meeting, RBI Governor Shaktikanta Das stated, "We must continue to be steadfast in our efforts to bring the CPI down.
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