RBI Curbs Rupee Volatility But Doesn't Fix Value, Says FM Sitharaman
Finance Minister Nirmala Sitharaman clarifies RBI's role in managing rupee volatility and shares goals for India's fiscal deficit and debt.
Union Finance Minister Nirmala Sitharaman has clarified the role of the Reserve Bank of India (RBI) in managing the national currency, stating that while the central bank takes active steps to prevent RBI rupee fluctuations, it does not unilaterally determine the value of the rupee.
Speaking to journalists in Tiruchirappalli, Tamil Nadu, the Finance Minister explained that the RBI's interventions are designed to stop abrupt and sudden movements in the exchange rate rather than attempting to fix a specific value for the currency. This clarification comes at a time when currency volatility remains a key concern due to its direct impact on inflation and the cost of imports.
Focus on Fiscal Health and Debt Reduction
Beyond currency management, Sitharaman provided an update on India's broader economic trajectory. She highlighted a positive trend in the country's fiscal position, noting that the fiscal deficit has been declining consistently year after year.
The Finance Minister revealed a strategic long-term goal for the nation's economy: the government is working toward reducing the debt-to-GDP ratio to 50 per cent by the year 2030. While acknowledging that concerns regarding the country's debt levels are justified, she maintained that the overall debt burden has been steadily decreasing.
Tackling Inflation and External Pressures
Addressing the issue of inflation, the Finance Minister noted that the government is implementing various measures to boost per capita income. However, she pointed out that several external factors beyond domestic control have fueled inflationary pressures, including:
- The lingering effects of the COVID-19 pandemic.
- Ongoing geopolitical conflicts.
- The volatility and rise in crude oil prices.
Sitharaman assured that the Centre is continuously taking steps to shield the general public from the adverse effects of these global developments.
Empowering Women and Future-Ready Education
Earlier in the day, the Finance Minister attended the Platinum Jubilee celebrations of her alma mater, Seethalakshmi Ramaswami College (SRC). During her address, she called for a stronger link between educational attainment and economic empowerment for women.
"Our responsibility now, therefore, is to ensure that progress in education opens greater opportunities for employment, for enterprise, and also for leadership," Sitharaman stated.
She highlighted the success of the Mudra loan scheme, noting that approximately two-thirds of these loans have been granted to women, enabling them to start and scale small businesses.
Investing in Skills and Technology
The Finance Minister also urged educational institutions to foster deeper partnerships with industry and leverage government skill development initiatives. She specifically mentioned the ITI upgradation programme, which involves an investment of Rs 60,000 crores to upgrade 1,000 government ITIs, with industry partners acting as co-managers.
Looking toward the future, Sitharaman emphasized the importance of international collaboration in cutting-edge fields to prepare students for the evolving job market. These key areas include:
- Artificial Intelligence (AI)
- Semiconductors
- Biotechnology
- Climate Science