Finance Minister Nirmala Sitharaman on Monday asserted that the Indian economy remains robust despite external challenges stemming from the West Asia conflict, which has led to rising prices exerting pressure on the three Fs: fuel, fertiliser, and forex.
Referring to Prime Minister Narendra Modi's call for citizens to conserve fuel and avoid unnecessary forex spending, Sitharaman stated, "Crude prices have been high and fluctuating. The increase in international fertiliser prices is unimaginable. High gold prices are also posing challenges on the external front. All these payments have to be made in foreign exchange. We must appreciate that the challenges are more externally driven."
Calibrated Policy Response
Addressing an event organised by Sidbi in Mumbai, the minister said the government has been working to address these challenges since the budget session after the war broke out. "The policy response has been very calibrated to absorb the shock where citizens and businesses are exposed: support MSMEs and exporters, where working capital is under stress, and preserve the underlying growth momentum," she said, adding that the Economic Stabilisation Fund was created to deal with such challenges.
She listed a series of measures, including tax cuts, a new credit line for businesses backed by a government guarantee, and support for exporters, to argue that the Centre has been proactive.
Fuel Price Shield and Forex Challenges
Later, Sitharaman told reporters that the government had shielded consumers from an increase in fuel prices for 75 days and took a Rs 1 lakh crore hit due to excise cuts. However, oil retailers are now raising prices to cope with high global prices. "These price increases are not minor; all will have to be paid through foreign exchange only. So, these are challenges, but I am confident we will be able to handle them, which are not of our making. If crude oil prices are rising, we will have to constantly monitor this but ensure that people do not suffer," she said after an event organised by Texprocil.
The finance minister also said the government is willing to hear suggestions, including on capital gains, amid demands from overseas investors.
Slams Opposition for Fear-Mongering
Sitharaman also slammed the opposition for creating a "cynical and pessimistic narrative" after the PM's appeal for austerity, asserting that such observations are factually incorrect. "It (the narrative) is wrong because it is fear-mongering. India cannot afford fear-mongering. We need to give confidence to the people with our words and actions," she said.
