Govt has a targeted approach to taming inflation, says FM

Our Bureau | | Updated on: Aug 02, 2022
**EDS: VIDEO GRAB** New Delhi: Union Finance Minister Nirmala Sitharaman speaks in the Rajya Sabha during ongoing Monsoon Session of Parliament, in New Delhi, Tuesday, Aug. 2, 2022. (SANSAD TV/PTI Photo) (PTI08_02_2022_000125B)

**EDS: VIDEO GRAB** New Delhi: Union Finance Minister Nirmala Sitharaman speaks in the Rajya Sabha during ongoing Monsoon Session of Parliament, in New Delhi, Tuesday, Aug. 2, 2022. (SANSAD TV/PTI Photo) (PTI08_02_2022_000125B) | Photo Credit: -

‘Both the government and the RBI are taking steps to bring down inflation below 7 per cent’

Finance Minister Nirmala Sitharaman on Tuesday said the government has adopted a targeted approach, based on ground-level inputs to protect vulnerable section from the impact of inflation.

Retail inflation, based on Consumer Price Index, recorded 7.04 per cent the month of June, after touching an eight-year high of 7.89 per cent in the month of May. Sitharaman was replying to a short-duration debate on price rise in the Rajya Sabha.

“Nobody is in denial about price rise. Government is having targeting approach, based on input from ground, to tackle inflation,” she said. Further she mentioned that both the government and the Reserve Bank are taking steps to bring down inflation below 7 per cent and further under 6 per cent. India has adopted a system of inflation targeting which mandates RBI Governor led Monetary Policy Committee (MPC) to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side.

Sitharaman also countered opposition charges that the central government was only working for Ambanis and Adanis, and not the poor. uch arguments, she said only politicise an important debate like the one on price rise

She stressed that the fundamentals of the Indian economy are strong. Indian economy compared to the situation prevailing in peer-group nations and even developed countries is definitely “much better”, she said. However, she also acknowledged that global factors are impacting the economy, and said “these are realities”.

No new GST levy

Commenting on specific issues raised by various members, Sitharaman said GST Council has not imposed any new levy on essential items consumed by the poor, though such products were taxed in one form or the other by almost all States in the pre-GST era.

Almost every State, including West Bengal, Jharkhand, Maharashtra and Kerala, imposed levies on items such as pulses, flour, curd, paneer, and buttermilk before the GST regime kicked in on July 1, 2017. “The GST Council has not imposed any new tax on essential items,” she emphasised.

The ongoing Monsoon Session of parliament has witnessed several disruptions by the opposition after GST was imposed on many pre-packed and labelled essential items.

The minister said all States at the last GST Council meeting held at Chandigarh had agreed to the proposal to levy 5 per cent GST on pre-packed, labelled food items. Not one person (state minister) spoke against the GST during the meeting, she added.

She stressed that taxes have not been levied on food items consumed by the poor, as the GST has not been imposed on items that are sold loose. While the minister was referring to a tax on a food item in West Bengal in the pre-GST era, TMC party leader Derek O’Brien tried to raise a point of order and later his party staged a walkout.

Sitharaman also clarified there is no GST on crematoriums, but the tax is only on the construction of a new crematorium. Also, there is no GST on hospital beds or ICUs, but only on rent of ₹5,000 per day in a hospital. Further, she mentioned that there is no GST on withdrawal of cash from banks. GST is levied only on bank purchasing cheque book from printer but there is no tax when customer gets them.

Published on August 02, 2022
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