Retail inflation stabilized in the range of 2-6%, core rate fell to 3.8% in December 2023: FM Sitharaman

Finance Minister Nirmala Sitharaman, in her speech to Parliament on Wednesday, February 7, said retail inflation in India has stabilized within the tolerance range of 2 to 6 percent and core inflation fell to 3.8 percent in December 2023.

While discussing the interim Union Budget for 2024-25, Sitharaman highlighted key financial indicators and government initiatives aimed at strengthening economic growth and fiscal stability.

Addressing inflation concerns, Sitharaman pointed to a decline in retail inflation, which fell from an average of 6.8 percent in April-December 2022 to 5.5 percent in the corresponding period in 2023. She noted that retail inflation has stabilized within the reported tolerance range of 2-6 percent, indicating a positive development in economic indicators.

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Sitharaman said, “Speaking of inflation, retail inflation has declined from an average of 6.8 percent in April-December 2022 to 5.5 percent in the corresponding period of 2023. 6 percent. Core inflation even fell from 5.1 percent in April 2023 to 3.8 percent in December 2023.”

The finance minister highlighted a decline in core inflation, which fell from 5.1 percent in April 2023 to 3.8 percent in December 2023, signaling improved economic resilience. Regarding capital expenditure for 2024-25, Sitharaman announced an outlay of 11,11,111 crore, an increase of 17 per cent over the Revised Estimates (RE) of 2023-24.

Sitharaman said, “For capital expenditure for 2024-25, we have retained an expenditure of 11,11,111 Crores, which is about 17 per cent more than the RE of 2023-24 and this expenditure is higher than the forecast GDP growth rate of 10, 5 percent.” . So even faster and higher than the GDP growth rate that we took into account for capital expenditure.”

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The finance minister added: “The fiscal deficit glide path of 5.8 per cent that we presented and approved in the House of Representatives is what we have envisaged for this year and for next year we forecast it will be 5.1 per cent. “We actually expected to get 5.9 and 5.2, which is what we expected next year, but we were a lot more cautious.”

She noted that this spending exceeded the projected GDP growth rate of 10.5 percent, reflecting the government's priority on infrastructure development and economic growth. Sitharaman also outlined the fiscal deficit glide path, forecasting a decline to 5.1 percent next year, underscoring prudent fiscal management.

Here's your comprehensive three-minute summary of everything Finance Minister Nirmala Sitharaman said in her Budget speech: Click here to download!