Core inflation actually declines from 5.1% in April 2023 to 3.8% in December 2023: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman has emphasized key financial indicators and government initiatives aimed at bolstering economic growth and fiscal stability. Sitharaman’s remarks shed light on various aspects of the budget, including inflation, capital expenditure, and allocations for Jammu and Kashmir. Addressing concerns regarding inflation, she underscored a reduction in core inflation, which decreased from 5.1 percent in April 2023 to 3.8 percent in December 2023, signaling improved economic resilience. She added retail Inflation has declined from an average of 6.8 per cent in April-December 2022 to 5.5 per cent in the corresponding period of 2023. The retail inflation is now stable and within the notified tolerance band of 2-6 per cent.

In terms of capital expenditure for 2024-25, she said ‘For capital expenditure for 2024-25 we have kept and outlay of Rs 11,11,111 crore which is about 17 per cent higher than the RE of 2023-24 and this outlay is higher than the projected GDP growth rate of 10.5 per cent. So even faster and higher than the GDP growth rate we have accommodated for capital expenditure’. The Minister added ‘the fiscal deficit glide path which we had submitted before the house and got approved, 5.8 per cent is what we have provided for this year, and in the forthcoming year we are predicting that it will be 5.1 per cent, actually 5.9 is what we have expected to reach and 5.2 is what we have expected to reach the next year but we have been fairly a lot more prudent’. This outlay, she noted, exceeded the projected GDP growth rate of 10.5 percent, reflecting the government’s prioritization of infrastructure development and economic expansion. She also outlined the fiscal deficit glide path, projecting a reduction to 5.1 percent in the forthcoming year, underscoring prudent fiscal management practices.

Sitharaman said ‘Transfers to jammu Kashmir gets Rs 3 thousand crore for meeting the additional expenditure towards central assistance to Union Territory of Jammu and Kashmir for bridging the resource gap”. Minister added ‘Jammu and Kashmir is seeking a vote on accounts for Rs 59,364 crore which is only for part year because the whole year’s BE is Rs 1,18,728 crore, this covers the revenue expenditure of Rs 40 thousand crore and capital expenditure Rs 19,283 crore. So the central government will provide the government of Jammu and Kashmir Rs 41,751 crore in 2023-24 and Rs 37,278 crore in 2024-25 as assistance to the Union Territory. This is their interim Budget’.