Retail Inflation Remains Within Tolerance Band:FM

FM Addresses Concerns on Debt-to-GDP Ratio, Assures Control

Ira Singh
Khabar Khabaron Ki,08 Feb’24

During the sixth day of the Budget Session, Union Finance Minister Nirmala Sitharaman addressed concerns about inflation, assuring Parliament that the Consumer Price Index (CPI) inflation rate is within the tolerability threshold of 4 percent with a deviation of +/-2 percent. Sitharaman’s remarks come at a critical juncture as policymakers seek to balance economic growth with price stability amidst global inflationary pressures.

The FM further addressed the concerns raised over India’s debt-to-GDP ratio following the release of the International Monetary Fund’s report. Sitharaman emphasized the importance of contextualizing the figures presented in the report, stating that they represent an extreme worst-case scenario rather than an inevitable outcome.

She further explained to the house that even for advanced countries, debt to GDP also stands at 100 per cent and held that the government’s external debt is “Na ke barabar” (almost non-existing).

Bilateral Investment treaties is set to get a boost in financial year 2024-25

In her Budget speech for the fiscal year 2024-25, Union Finance Minister Nirmala Sitharaman emphasized the significant increase in Foreign Direct Investment (FDI) inflows into India over the past decade, marking what she described as a “golden era” for the country’s economy.Foreign Direct Investment (FDI) inflow into the country in the 2014-23 period doubled to $596 billion, compared to the inflows in 2005-13, while the focus of the bilateral investment treaties being negotiated with foreign partners is now on `first develop India’, she said.

India’s FDI inflows were 2.5% of GDP during FY15-23 as against 2.2% during FY05-14.

An important element in the budget speech of Union finance minister (FM) Nirmala Sitharaman was that India is negotiating bilateral investment treaties (BITs) — treaties that reciprocally protect and promote foreign investment under international law — to encourage foreign investment inflows to India. A quintessential component of BITs is the investor-State dispute settlement (ISDS) mechanism that allows foreign investors to sue States for treaty breaches. The FM’s statement assumes importance as it comes at a time when India is negotiating.

The FM said that the government is trying to ensure that the foreign investment flow continued through BITs that focussed on the country’s development interest.The country is in the midst of intense negotiations on BITs with a number of trade partners, specifically the UK and the EU,she said.

“For encouraging sustained foreign investment, we are negotiating bilateral investment treaties with our foreign partners, in the spirit of ‘first develop India,” Sitharaman said.