Nirmala Sitharaman: Indian Economy will grow soon as private sector investment has begun to flow into the nation
According to Finance Minister Sitharaman, the Indian economy will perform well in the upcoming quarters despite the negative effects of the rising US interest rates.
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Private sector will aid economic growth
According to her, the economy is anticipated to grow soon as a result of the private sector investment that has begun to flow into the nation.
The minister said that she was confident Prime Minister Narendra Modi would win re-election in 2024 with "good numbers" since she felt the current government had kept its word.
While specific commodities could be experiencing inflation, "broad-basket inflation" was stable, according to Sitharaman in an interview with The Economic Times, and the RBI was focusing on the needs of the nation rather than synchronising its operations with those of foreign central banks.
Perishable commodities may experience price rise
As a result of their short shelf lives and the way the monsoon has developed, all perishables and vegetables may be experiencing price increases, and the finance minister warned that inflation may return.
She continued, "But overall, I think the basket itself is steady," noting that most central banks are paying greater attention to concerns about growth.
The finance minister said the excitement at last week's B20 conference couldn't have happened if Indian companies were still holding off in response to a query about private sector investment. The author stated, "No, they now want to actively play the game and also become large players -- big, significant, and impacting players, each according to their size.
She said confidently that private sector capex has skyrocketed, saying, "I think the Indian private sector has entered the game...investors are coming forward, industry is coming forward."
GDP May increase by 7.8% this quarter
According to Sitharaman, the economy would do strongly in the upcoming quarter (July-September). The GDP may increase 7.8% from a year ago in the April–June quarter, according to an ET survey released last week.
Given that the upcoming quarter in India coincides with the holiday shopping season, there are sufficient grounds to predict that demand would continue to rise. Therefore, I predict that the GDP figures for the following quarter will be strong.
When asked about India's interest rate cycle in light of the recent surge in inflation brought on by vegetables, the finance minister responded that the central bank is taking the demands of the local economy into consideration.
In response to inquiries about the potential of "high for long" interest rates in the US and the implications of such a situation, Sitharaman replied, "So, to that extent, the 'high for long' might not be even close to what our banks, our central bank is thinking is my understanding.
She added, that she won't claim that people are sufficiently protected from high US interest rates or not, but she would simply say that she think we know how to handle a rise or a downturn coming out of it.
The finance minister claimed that several of her counterparts praised India for its "content, conduct, and process" at the G20 and for putting forth a compelling agenda on four issues, including debt, MDB reforms, crypto assets, and digital public infrastructure, in addition to funding for climate change mitigation and infrastructure for future cities.
What Hindenburg report Says?
Regarding the Hindenburg report, Sitharaman claimed that although some short sellers can profit handsomely, the regulatory tools that result from it can also improve corporate governance. But from what I can see, SEBI (Securities and Exchange Board of India) is able to distinguish between the wheat and the chaff with what it does. If correctly applied, the regulatory tools that result from this could improve corporate governance.
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