Rupee has strengthened against British pound this year: FM Sitharaman

Global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are major reasons for the weakening of the Indian Rupee against the US Dollar

The Indian rupee has strengthened against the British Pound in 2022 though it has depreciated against the US dollar, Finance Minister Nirmala Sitharaman said on Tuesday.

Global factors -- such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions -- are the major reasons for the weakening of the Indian Rupee against the US Dollar, she said in a written reply to the Rajya Sabha.

"The British Pound, has weakened more than the Indian rupee against the US dollar and therefore, the Indian rupee has strengthened against the Pound in 2022," she noted.

The nominal exchange rate is only one of the factors that impact an economy, the minister said.

The depreciation of a currency is likely to enhance the export competitiveness, which in turn impacts the economy positively while it is also likely to impact the imports by making them costlier.

In reply to another question, Sitharaman said GST rates or rate slabs applicable on goods and services are prescribed on the recommendations of the GST Council.

GST Council has not made any recommendation for change in the existing GST rate slabs so far, she said, adding that a Group of Ministers (GoM) has been constituted by the council in its 45th meeting held on September 17, 2021.

One of the terms of reference of the GoM is to review the current rate slab structure of GST, including special rates, and recommend rationalisation measures, including a merger of tax rate slabs, required for a simpler rate structure in GST.

Regarding Centrally Sponsored Schemes (CSS), she said a new procedure for the flow of funds to the state governments was introduced with effect from July 1, 2021.

As per the revised procedure, each state has to notify a Single Nodal Agency (SNA) for each CSS and open a bank account of each SNA, she said in another reply.

The CSS funds flow from the Centre to the consolidated fund of the respective state and further to the bank account of SNA, she said.

The new procedure has brought more transparency to the availability of CSS funds in state treasuries and bank account of SNAs, and this has led to better monitoring of the utilisation of funds and availability of funds with SNAs for CSS implementation.