More Stories

Informist, Monday, Feb. 17, 2025

 

Please click here to read all liners published on this story

--Sitharaman: To continue customs duty rationalisation to woo investors 
--Sitharaman: Monetary policy, fisc mgmt working in sync to aid econ growth 
--Sitharaman: Inflation has been well within tolerance band 
--Sitharaman: Every measure will be taken to lower debt-to-GDP ratio 
--Fin secy: Already started seeing econ effect of FY26 income tax boost 
--Econ secy: No need for govt intervention in stock mkt, to correct itself 
--Econ secy: FII outflows short-term scenario amid global uncertainties 
--Banking Secy: Increasing deposit insurance limit under consideration 
--CONTEXT: Banking Secy Nagaraju speaking at post-Budget interaction 
--Fin secy: India positioned strong to handle global headwinds 
--Fin secy:India mkt remains resilient; FPI outflows on global uncertainties

 

MUMBAI – The government will take every measure to bring down India's debt-to-GDP ratio to the target of 50% by 2030-31 (Apr-Mar), with a band of 100 basis points on either side, Finance Minister Nirmala Sitharaman said at a post-Budget event here on Monday.

 

As per the Statements of Fiscal Policy as required under the Fiscal Responsibility and Budget Management Act, 2003, the Centre's debt-to-GDP ratio in FY26 is seen falling to 56.1% from 57.1% in FY25. Net of the liabilities on account of investment in Special Securities of States under the National Small Savings Fund, the Centre's debt-to-GDP ratio is seen declining to 55.4% in FY26 from 56.2% in the current financial year.

 

In terms of fiscal deficit, Sitharaman said, "We shall follow the fiscal glide path and reach below 4.5% by FY26." In FY25, the government's fiscal deficit is seen declining to 4.8% of GDP, with Sitharaman setting a target of 4.4% for FY26. This is in line with the medium-term roadmap spelt out by the government, which entailed reducing the deficit to below 4.5% by FY26. "Borrowings are essentially going only for building assets and that is why capex to GDP number and fiscal deficit number are close to each other proving that we borrow to build assets," she said.

 

Citing the resilience in the economy, Sitharaman said inflation has been well within the tolerance band (of 2-6%) and inflation-related management of supplies has worked in tandem with the Reserve Bank of India's monetary policy. "So inflation has been monitored regularly both from the supply side and also from the Reserve Bank, the monetary side, and that is one of the reasons why the RBI has chosen to cut the interest (rate) after about maybe four or five years. So inflation-related management of supplies and also the monetary policy are working in sync and that is going on, I think, in order to favour the growth cycle," she said. 

 

India's headline CPI inflation fell to a five-month low of 4.31% in January from 5.22% in December, led by lower vegetable prices, data released Wednesday by the statistics ministry showed. The CPI inflation was 5.10% in January 2024.

 

Sitharaman also said that the government is working towards further rationalising customs duty in order to attract foreign investment into the country. "There is a lot of rationalisation happening in terms of our basic customs duty and their application, safeguard duties or any anti dumping duties that are also periodically reviewed... We are willing to be an investor-friendly country and as a result, the duty cuts and the rationalisation that have been announced is a continuing process and we shall keep doing that," she said. 

 

Depatment of Financial Services Seceratry M. Nagaraju also said that in order to protect depositors' trust in the banking sytem, the government is working on enhancing the insurance cover on deposits. "As and when the government approves, we will notify it. This is under the consideration of the government," Nagaraju said. The Deposit Insurance and Credit Guarantee Corp. currently insures deposits up to INR 500,000, a limit that was last raised from INR 100,000 in February 2020.

 

Nagaraju declined to comment on the troubled Mumbai-based New India Cooperative Bank. "The RBI is seized of the matter… we are not going to comment on that." Nagaraju advised depositors to contact the bank or visit the DICGC website for updates on their deposit insurance claims.

 

Last week, the RBI had barred New India Cooperative Bank from granting loans, accepting new deposits, or making payments without its prior approval. Withdrawals from savings or current accounts were also frozen, with limited exceptions for loan settlements.

 

EQUITY MARKETS

Addressing the recent turmoil in Indian equity markets, Economic Affairs Secretary Ajay Seth said that it is just a result of uncertainty in global markets and equities will correct themselves. He added that government intervention is not required as the Indian economy is doing well and will continue to do so. 

 

"In terms of resilience, Indian markets have held...I think this strength of the Indian economy will continue to grow despite global headwinds. Global headwinds we have to face, we have faced it in the past and we will continue to face it but I think India is in a strong position to help them (foreign institutional investors)," he said. 

 

Finance Secretary Tuhin Kanta Pandey also said that Indian stock markets have remained resilient and will continue to be so desite the global headwinds. End

 

Reported by Kabir Sharma and Kshipra Petkar

Edited by Tanima Banerjee

 

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.