The Centre and the Reserve Bank of India (RBI) are maintaining a vigilant watch over the movements in the rupee and the fluctuations in gold and silver prices, while standing ready to deploy available policy tools to uphold macroeconomic stability, according to Department of Economic Affairs (DEA) Secretary Anuradha Thakur.
Monitoring Currency and Precious Metals
In her remarks, Thakur emphasized that the government, in collaboration with the RBI as the primary regulator, has the responsibility to closely track developments concerning the rupee and the rising prices of silver and gold. She stated that authorities are prepared to utilize the instruments available under existing rules, regulations, and laws to address these dynamics as needed.
"As far as the rupee or the increase in prices of silver and gold is concerned, our job as a government and with the RBI as the main regulator is to monitor these developments and, from time to time, use the instruments available under rules, regulations and laws," Thakur explained. She added that maintaining the rupee within a specific range is a delicate and nuanced exercise that requires careful attention.
Budget Focus on Manufacturing Sector
Thakur highlighted the government's strong policy focus on the manufacturing sector, noting that it has achieved significant gains since 2014. This progress has been bolstered by key initiatives such as Make in India and the Production-Linked Incentive (PLI) schemes, which have driven growth and investment in the industry.
"This year's Budget gives a major push to manufacturing. Initiatives such as Semiconductor Mission 2.0 and the development of rare earth corridors are examples of the long-term vision reflected in the Budget," she said. Thakur pointed out that the Union Budget builds on this existing momentum and lays a solid foundation for sustained, long-term economic growth.
Confidence in Equity Market Recovery
The DEA Secretary expressed optimism about the recovery of equity markets, citing that the Budget has outlined multiple strategic steps aimed at strengthening medium- and long-term growth fundamentals. These measures are being implemented in partnership with the private sector, encompassing projects like medical hubs and university townships.
"These measures are being implemented in partnership with the private sector, whether it is medical hubs, university townships or other initiatives. I am quite confident that the market will recover," Thakur asserted. She reiterated her confidence that the market will eventually rebound and continue on a growth trajectory, supported by the robust long-term prospects outlined in the Budget.
Cyclical Nature of FPI Flows
On the topic of foreign portfolio investment (FPI) flows, Thakur noted that such movements tend to be cyclical in nature. She explained that the current phase reflects profit booking by investors and the availability of higher interest rates in some global markets, which has prompted capital movement away from India.
"Such flows are inherently cyclical. The current phase reflects profit booking by investors and the availability of higher interest rates in some global markets, which has prompted capital movement away from India," she said. Despite these short-term fluctuations, Thakur remains positive about the market's eventual recovery and continued growth, given the strong long-term growth prospects highlighted in the Budget.
