She said though most central banks in developed countries synchronise increase in interest rates, the RBI considers the purpose of the Indian economy a lot more and takes a call accordingly.
“It (RBI) is not necessarily synchronising (with western central banks) but at the same time, also watching the global movement of capital. I think the RBI is looking at the Indian economy a lot more for our purpose,” Sitharaman said in a post-budget interaction in Jaipur.
She explained that the situation in emerging markets was different from developed nations and added that the western central banks were raising rates as they had low rates for a very long time. The RBI is “seized of the matter” and it is RBI’s business “to manage inflation and keep it under the expected limits”, she added.
The minister said the government was taking a number of measures to address inflation.
“We have taken a lot of steps, for example, encouraging farmers to sow pulses so that the production of pulses in India increases in the coming sowing season,” Sitharaman said.
The government has reduced to a single digit or completely removed the import duty on pulses. “It has made imports convenient and pulses are available quickly and cheaply in India,” she said.
Retail inflation again breached the RBI’s upper tolerance limit and touched a three-month high of 6.52% in January, mainly due to higher prices in the food basket, including cereals and protein-rich items.
Capex and Private Investment
On concerns over slow private investment, Sitharaman said the private sector is expanding but is also looking at a suitable time for investment , considering demand concers due to recession in many countries.
She said considering the limitation of the industry, the Centre has been acting by increasing the capital expenditure (capex) since the last three consecutive budgets.
“We have not stopped from acting. In the last three budgets, we consistently increased public spending,” she added.
On ED Raids
When asked about the Directorate of Enforcement’s ongoing raids on Congress leaders in Chhattisgarh, the finance minister clarified that no action is executed with a sense of revenge. “Any agency first collects data and only then action is taken. No action is executed with a sense of revenge,” she said.
ED had conducted fresh searches on Monday at nearly a dozen locations in Chhattisgarh over the coal levy scam, including residential and office premises of various Congress leaders.
“Each agency going there has been bringing tangible material… some of which has been pictured by the media. Instead of accusing people of vindictiveness, they should explain to people and its own plenary as to why their people are out on bail,” she said.