Fiscal and monetary measures to boost consumption, private investment says FM

Union Finance Minister Nirmala Sitharaman said the government and RBI will continue to coordinate and improve growth and contain inflation.
| Photo Credit: PTI

Finance Minister Nirmala Sitharaman on Saturday (February 8, 2025) said, “Fiscal and monetary measures announced recently will help boost consumption and promote private investment.”

The Budget presented by the Finance Minister on February 1 proposed a slew of measures including significant income tax cuts for the middle class. Individuals earning up to ₹12.75 lakh in a year will not have to pay any taxes, benefiting 1 crore taxpayers.

Also Read: RBI Monetary Policy 2025 key highlights: Repo rate cut to 6.25%, GDP likely to be 6.4%

On the monetary side, the Reserve Bank of India (RBI) on Friday (February 7, 2025) slashed the policy rate by 25 basis points, the first rate cut in five years to support growth.

“After the Budget, the few inputs I’ve had from some business leaders is that the orders for fast-moving consumer goods for April-June are already getting booked, and the industry is clearly seeing signs of a possible recovery of consumption,” she said at a media interaction after addressing the Board of the RBI in the customary post-budget meeting.

As a result, she said, many of them are looking at reviewing their capacity utilisation itself, which means you can safely see that the triggers for a consumption-driven cycle are clearly being felt by those who have to make investment decisions.

“So, I see this as a positive sign and with yesterday’s decision of the RBI, together things can move in alignment and the required traction we made in this course,” she said.

She also said both the government and the RBI will continue to work in a well-coordinated fashion to prop up growth and contain inflation.

“Fiscal and monetary policy are working in tandem and there has been good coordination between the government and the RBI,” she added.