B20 Summit India 2023: Rapid economic reforms in the last 9 years, Nirmala Sitharaman said – Keeping inflation under control is a priority

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Sitharaman said that central banks have to keep in mind the growth and development priorities along with controlling inflation. He further said that higher interest rates may come in the way of economic recovery.

Finance Minister Nirmala Sitharaman on Friday said that controlling inflation is the priority of the government, but indicated that increasing interest rates is not the only option to tackle price rise. His statement came during the B20 Summit India, which is being hosted by the Confederation of Indian Industry (CII). Nirmala Sitharaman said the obsession with using interest rates as the only tool to tackle inflation and not managing supply-side factors will not provide a complete solution.

Sitharaman said that central banks have to keep in mind the growth and development priorities along with controlling inflation. He further said that higher interest rates may come in the way of economic recovery. His comments come at a time when retail inflation in India is expected to rise in the near term. Retail inflation in the country rose to a 15-month high of 7.4 per cent in July, mainly due to higher prices of vegetables and cereals.

Rising inflation in the past few months has forced the government to take some aggressive steps, including selling tomatoes and onions at subsidized rates, releasing stocks of wheat and sugar in the market to bring down prices, and even higher exports. Fees are also included. Despite its efforts, food prices have remained high this month and the situation may start to improve by the end of August.

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