Inflation rate during 2020-23 lower than global average, says FM Sitharaman

Finance Minister Nirmala Sitharaman in Lok Sabha

Finance Minister Nirmala Sitharaman slammed the opposition on their management of price pressures, terming the previous Congress-led government's track record "impossible to beat" as India suffered from high, double-digit inflation during 2009-2013.

In contrast, "India's inflation between 2020 and 2023 was much below compared the global average. Prime Minister Narendra Modi, in spite of Covid, planned the economy in such a way that our inflation did not affect so badly," Sitharaman said while replying to the discussion on Budget 2024 in the Lok Sabha on July 30.

She attributed higher inflation during the United Progressive Alliance-era to reckless policies, adding that domestic inflation was higher versus global average during UPA's governance.

"UPA government run by Harvard and Oxford leaders did not know when and how to withdraw stimulus leading to high, double digit inflation, high fiscal deficit and high debt between 2009-2013," she added.

As per latest data, India’s retail inflation rose to four-month high of 5.08 percent in June compared with 4.75 percent in the previous month as food inflation galloped to 9.4 percent. June marks the eighth consecutive month of over eight percent food inflation, data released on July 12 showed.

The finance minister did not specifically address the issue of food inflation during his reply in the lower house of the parliament.

India's central bank expects headline inflation to be 4.5 percent in FY25, outside its mandated target of four percent.

Sitharaman further said that the Centre is confident of achieving the fiscal deficit target of 4.9 percent of the GDP for FY25 as well as the glide path set for 2025-26.

In her Budget speech on July 23, the minister had reiterated the Centre’s commitment to scale down the fiscal deficit target to below 4.5 percent of the GDP by 2025-26 and added that from 2026-27, the endeavour will be to keep the deficit such that debt as a percentage of GDP will be on a declining path.

The Centre lowered the fiscal deficit gap to 5.6 percent in FY24.