NEW DELHI: Finance minister Nirmala Sitharaman has said that the government believes inflation would come down, and that 3.1% GDP deflator is feasible in 2022-23. The FM was responding to questions on credibility of budget estimates in the Rajya Sabha on Tuesday.
She said that the GDP deflator, which is the difference between nominal and real GDP growth rate, has been 3.15% over the past five years and the estimate for 2022-23 is close to the five-year estimate.
She said that deflator is neither consumer inflation (CPI) nor is it wholesale inflation (WPI) and that it has components of both. She admitted that the wholesale inflation is much higher than the retail inflation, but reiterated that the government believes the wholesale inflation would shrink in 2022-23. The Wholesale Inflation in February was 13.11% while the retail inflation was 6.1% during the month.
She was responding to Congress Rajya Sabha MP and former finance minister P Chidambaram’s question on budget estimate of 11.1% nominal GDP growth even as the Economic Survey puts the real GDP growth rate at 8-8.5%. Chidambaram had, therefore, questioned the government’s inflation (deflator) estimates in 2022-23.
The Finance Minister said that the Economic Survey is an independent report, and the budget estimates are based on advanced estimates released by the National Statistics Office (NSO). She hinted that there could be differences in the Economic Survey estimates and the Budget estimates.