CPI spike short-term 'hiccup', India offered lowest inflation for 9 years: Piyush Goyal

Goyal said India has the advantage of a young demographic dividend

Terming the high Consumer Price Index inflation figures for July a short-term "hiccup", Commerce Minister Piyush Goyal emphasised that the country offered the lowest inflation rates for nearly a decade.

"With inflation despite the hiccups we are facing in the short term today, we have seen nearly a decade of controlled inflation. In the India story of 75 years, India in this nine-year period has offered the lowest inflation rate that we have ever experienced," Goyal said on August 19.

Data released on August 14 showed headline retail inflation shot up to a 15-month high of 7.44 percent in July - significantly higher than economists' expectations of 6.6 percent. As per the Reserve Bank of India's (RBI) monthly bulletin, Inflation is set to average far higher than 6 percent in the current quarter.

A surge in vegetable prices and sustained cost pressures in key staples such as cereals and pulses were primarily responsible for the high CPI numbers for July. The government, on its part, has taken a number of measures to check the rise in food prices – from distributing tomatoes at discounted prices in major consumption centres to conducting open market sales of rice and wheat via e-auctions and banning the export of non-basmati white rice.

Speaking at Moneycontrol's Indian Family Business Awards 2022, Goyal said that the Indian economy is in good shape with comfortable foreign exchange reserves and high growth. He also said that the country has the advantage of a young demographic dividend.

"India today is enjoying the fruits of our demographic dividend with the average population under 30 years of age. All estimates seem to suggest we will continue to be a young population," Goyal said, adding that India is likely to become a $35-trillion economy in terms of GDP and in the next 30 years.

India is said to have overtaken China as the world's most populous country in April 2023 with its population reaching to about 1.425 billion, according to projections by United Nations.

The minister said that India, which is the fastest growing economy in the world currently, has ability to become one of the top three economies of the world. The Indian government has projected a GDP of 6.5 percent for the current financial year as it expects good growth momentum to continue.

Goyal said that the current leadership back in 2014 had inherited many challenges from the past government, including unpaid oil bonds debt, high interest costs, foreign exchange crisis, high inflation and interest rates, rapidly falling economic growth, low foreign direct investment and, faltering exports.

Expressing optimism over India's macroeconomic outlook, Goyal said that while India will create value for shareholders, the country will also focus on ensuring sustainable and inclusive growth.