Growth to be sustained, inflation pressures to subside, says finance ministry report

The finance ministry said in its monthly economic review that India's economic growth is likely to be sustained in the months ahead.

Inflationary pressures in India are likely to come down as external pressures ease.

In its report, the ministry said that the real GDP in the first quarter of 2022-23 is four per cent ahead of the same period in the previous year.

India is in a better position to calibrate its liquid assets.

The United Kingdom has been overtaken by Asia as the fifth largest economy. India is the fastest growing major economy.

The country has been facing a spike in costs for several months. The central government has taken a number of measures to ease supply-side pressures, but the central bank has raised interest rates and withdrawn all of the surplus cash from the banking system.

Growth in government revenues will help sustain capital expenditure through the remainder of the fiscal year according to the finance ministry.

The investment rate in the first quarter of 2022-23 will be one of the highest in the last decade due to the increase in private consumption.

Industry was asked by the finance minister what was holding them back from reviving investments.

There are macro economic risks.

India is integrated with the rest of the world and poses risks to growth and inflation.

Increased international focus on energy security in advanced nations could test India's handling of its energy needs. It might not be possible to remain satisfied in these uncertain times.

The ministry said that the risks come from lower crops-sowing and the need for deft management of agricultural commodities and market prices without jeopardising farm exports.

As companies pass on higher inputs costs to the consumer, core inflation may remain sticky.

Monetary policies are prudent.

Fiscal management and monetary policy are necessary for the country to fulfill its growth ambitions as they will ensure borrowing costs for the government and private sector.

Debt stock will be helped by vigorous pursuit of asset monetisation at all levels of government.

In the first quarter of the current financial year, India's gross domestic product grew by 13 percent.

The burden of lowering inflation is shared by monetary and fiscal policies.

The central bank is on the verge of not meeting its mandate. The Reserve Bank of India failed when average inflation is more than six percent for three consecutive quarters.

Inflation has been above the target for 35 months and eight months.