Are Working In Tandem To Boost Economic Growth: FM Sitharaman

By Fnf Correspondent | PUBLISHED: 08, Feb 2025, 16:42 pm IST | UPDATED: 08, Feb 2025, 16:43 pm IST

New Delhi: Union Finance Minister Nirmala Sitharaman on Saturday said that the government's monetary and fiscal policies are working in tandem and would further benefit the growing economy with the robust Budget and recent RBI decisions.

Addressing the media along with the Reserve Bank of India (RBI) Governor Sanjay Malhotra here, FM Sitharaman said there has been good coordination between the central bank and the government, and no one encroaches on the other.

She met the Central Board of Directors of the RBI, along with Union Minister of State for Finance Pankaj Chaudhary and Malhotra at the customary post-Budget meeting in New Delhi. According to the Finance Minister, the industry is seeing signs of recovery of consumption, and is looking at reviving capacity utilisation.

I see it as a positive sign and with the decision of the RBI to cut the report rate by 25bps, it can serve as the required traction," FM Sitharaman noted. The 25bps rate cut is anticipated to complement the consumption-boosting measures announced in the Union Budget 2025-26, providing a boost to domestic demand drivers.

Additionally, the RBI's indication that it will inject liquidity as needed to address any tightening of frictional and durable liquidity in the system will ensure that monetary policy transmission remains effective.

FM Sitharaman further said that the basic customs duty (BCD) changes were not a knee-jerk reaction to any global developments and had been in the works for the last two years. "We will provide tariff protection as required by the industry while focussing on making industry more competitive," she said.

The industry leaders are confident that the central bank, with the support of the government, would continue to ensure stability in the foreign exchange market as well in the face of pressure from the rising dollar on the emerging markets.