The report stated that the number is neither high enough to deter private consumption, nor too low to weaken inducement to invest.
The survey took a note of above-target inflation in India, estimated by the RBI at 6.8% for 2022-23. It said that the global commodity prices have remained elevated pushing the inflation upwards.
It also stated that challenges of depreciating rupee may result in further rate hikes by the central bank.
The survey stated India’s economy has rebounded since the Covid-19 pandemic, but the Russia-Ukraine conflict has triggered inflationary pressures and prompted central banks, including India’s, to reverse the ultra-loose monetary policy they adopted during the pandemic.
“During the current financial year, retail core inflation (inflation excluding ‘food and beverages’ and ‘fuel and light’ – the transitory components of the index) has shown a rising trend. Average core inflation for the period April-December 2021 stood at 5.9 per cent as against 5.4 per cent in corresponding period last year, and remained below 6 per cent during most months,” the report said.
An economic survey by Chief Economic Adviser V. Anantha Nageswaran was tabled in the parliament on Tuesday by Finance Minister Nirmala Sitharaman, a day before she presents the budget for the next fiscal year.
The Economic Survey is the government’s review of how the economy fared in the past year.