Union Finance Minister Nirmala Sitharaman said on Saturday that the government’s monetary and fiscal policies are effectively working together, complementing each other in a way that would further support the nation’s growing economy. She stressed that the recently announced Budget, along with the recent decisions made by the Reserve Bank of India (RBI), would foster growth and stability in the economic landscape.
Speaking to the media alongside RBI Governor Sanjay Malhotra, Finance Minister Nirmala Sitharaman highlighted the strong coordination between the central bank and the government, emphasizing that both institutions respect each other’s roles without overstepping boundaries, reported PTI.
She met with the Central Board of Directors of the RBI in Delhi for the customary post-Budget meeting, joined by Union Minister of State for Finance Pankaj Chaudhary and RBI Governor Sanjay Malhotra.
According to the Finance Minister, there are indications of recovery in consumption within the industry, with a focus on revitalising 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 expected to complement the consumption-boosting measures outlined in the Union Budget 2025-26, giving a significant boost to domestic demand drivers. Additionally, the RBI’s commitment to injecting liquidity as needed to address any tightening in frictional and durable liquidity within the system will ensure the continued effectiveness of monetary policy transmission.
Finance Minister Sitharaman also stated that the changes in the basic customs duty (BCD) were not a reactive measure to global developments, but rather had been carefully planned over the past two years.
“We will provide tariff protection as required by the industry while focussing on making industry more competitive,” she said.
Industry leaders are confident that, with the backing of the government, the central bank will continue to maintain stability in the foreign exchange market, despite the pressure exerted on emerging markets by the rising dollar.
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