New Delhi: Finance Minister Nirmala Sitharaman has emphasized the synchronized efforts between the RBI and government aligned on growth related to fiscal and monetary measures. In a recent statement, she highlighted the alignment of fiscal and monetary policies aimed at bolstering consumption and stimulating private investment.
“Whether it’s inflation or growth, particularly plugs for growth, it is appropriate for the RBI and the government to have coordination on this,” Sitharaman stated, underscoring the collaborative approach to economic management.
The government’s recent budget introduced significant income tax cuts for the middle class, with individuals earning up to ₹12.75 lakh annually now exempt from taxes, benefiting approximately one crore taxpayers.
This move is expected to increase disposable incomes, thereby enhancing consumption, savings, and investments in the economy.
Complementing these fiscal measures, the RBI announced a 0.25 percentage point reduction in its benchmark interest rate to 6.25%, marking the first cut in nearly five years. This monetary policy adjustment aims to support economic growth amid challenges such as high inflation and weak consumption.
Sitharaman expressed confidence that these coordinated efforts will lead to a durable recovery in private investment and sustained economic growth. She noted that the synergy between the RBI and the government is crucial for effectively managing the balance between inflation control and growth stimulation.
Analysts view this alignment between fiscal and monetary authorities as a positive development for India’s economic outlook. The combined impact of tax relief and lower interest rates is anticipated to boost consumer spending and encourage businesses to invest, thereby driving economic expansion.
The government’s focus on inclusive development, as reflected in the budget, along with the RBI’s accommodative monetary stance, underscores a comprehensive strategy to address current economic challenges and lay the foundation for long-term growth.
As the RBI and the government remain aligned on growth priorities, stakeholders are optimistic about India’s trajectory towards enhanced economic stability and prosperity.
