Finance Minister Nirmala Sitharaman has asserted that the Indian government is keeping a vigilant eye on the economic repercussions stemming from the ongoing crisis in West Asia, with particular attention to the effects on fuel, fertilisers, and foreign exchange reserves. At a gathering commemorating the anniversary of the Small Industries Development Bank of India, Sitharaman expressed concerns over the escalation in crude oil prices and the sharp rise in fertiliser costs, both of which have become significant issues for India’s economy. She pointed out that the surge in gold prices is also exerting pressure on the economic landscape.
Despite these external challenges, Sitharaman reassured attendees that India’s economic fundamentals remain robust. She cautioned against inciting panic and emphasized the importance of avoiding “fearmongering” during these unpredictable global times. She stressed that the current economic strains are primarily externally induced and advocated for maintaining public confidence through prudent and communicative governance.
The Finance Minister also brought attention to the government’s recent decision to cut excise duties on petrol and diesel. This measure, although expected to result in a revenue shortfall of nearly ₹1 lakh crore, was deemed essential to alleviate the financial burden on consumers. Furthermore, she addressed the issue of delayed payments to micro, small, and medium enterprises (MSMEs), revealing that approximately ₹8.1 lakh crore is stuck in pending dues. She urged public sector enterprises to adhere to the mandated 45-day period for clearing these payments.
Concerns are mounting in India regarding potential disruptions to petroleum and fertiliser imports due to tensions near the Strait of Hormuz, a vital global shipping lane. In recent weeks, fuel prices have risen significantly, with state-operated oil companies increasing petrol and diesel costs once again on Monday. Since mid-May, these prices have seen an increment of more than ₹7 per litre.
In light of the global economic uncertainty exacerbated by the West Asia conflict, Prime Minister Narendra Modi has previously advised citizens to exercise caution with their expenditures and avoid unnecessary purchases. This call for prudent spending aligns with the government’s broader approach to navigating the challenging economic environment while ensuring stability and confidence within the national economy.