Finance Minister Nirmala Sitharaman recently emphasised India's unwavering commitment to fiscal discipline, despite global economic challenges and an absence of rating upgrades by agencies like Moody's.
In an interview, she proudly highlighted that India has consistently met its fiscal consolidation and debt reduction targets, demonstrating a steadfast dedication to sound financial management.
During her presentation of the Union Budget for the fiscal year starting in April, Sitharaman took a balanced approach between maintaining fiscal prudence and stimulating growth.
In a significant move, she introduced the largest-ever tax relief for the middle class while laying out a clear path for reducing the fiscal deficit and bringing down the debt-to-GDP ratio by 2031. The Finance Minister assured that these measures would create a sustainable framework for economic growth.
While acknowledging that India had to borrow more during the pandemic to meet fiscal needs, Sitharaman stressed that the government had remained committed to its fiscal targets despite the global turmoil caused by the pandemic, supply chain disruptions, and geopolitical tensions.
"Despite these challenges, we have adhered to our commitment and fulfilled our fiscal targets year after year," she remarked. This steadfast approach, she argued, showcases India's commitment to fiscal consolidation.
Sitharaman also addressed the decision by Moody's Ratings, which recently ruled out an immediate upgrade of India's sovereign rating.
While the credit agency refrained from raising India's rating, the Finance Minister remained unfazed, confident that India's fiscal discipline and strategic investments would continue to drive economic growth. "We have shown fiscal responsibility, and we will continue to do so," she affirmed.
In her budget, Sitharaman struck a careful balance between maintaining fiscal health and spurring economic activity. She acknowledged the difficulties of managing the economy in a global environment marked by uncertainties but reassured the public that India's financial standing remained robust.
As the government forges ahead with strategic capital expenditure, the Finance Minister is confident that the nation's long-term fiscal and economic growth trajectory remains strong.
Through these measures, the government has not only committed to fiscal prudence but also ensured that there is room for the economy to grow.
The tax relief measures, combined with fiscal consolidation strategies, are expected to generate a positive economic cycle, boosting consumption, production, and employment in the coming years.
India's economy, underpinned by such careful fiscal management, continues to chart a path of stability and growth despite external challenges.
Sitharaman's continued focus on reducing the fiscal deficit and implementing targeted investments positions India for sustained long-term growth, even as credit rating agencies hold back on upgrading the country's sovereign rating.
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