(MENAFN- Trend News Agency)
The Indian government is considering spending an additional 2
trillion rupees ($26 billion) in the 2022/23 fiscal year to cushion
consumers from rising prices and fight multi-year high inflation,
two government officials told Reuters.
The new measures will be double the 1 trillion rupees hit
government revenues could take from tax cuts on petrol and diesel
the finance minister announced on Saturday, both the officials
said.
India's retail inflation rose to an eight-year high in April,
while wholesale inflation rose to at least a 17-year high, posing a
major headache for Prime Minister Narendra Modi's government ahead
of elections to several state assemblies this year.
'We are fully focussed on bringing down inflation. The impact of
Ukraine crisis was worse than anyone's imagination,' one official,
who did not want to be named, said.
The government estimates another 500 billion Indian rupees
additional funds will be needed to subsidise fertilisers, from the
current estimate of 2.15 trillion rupees, the two officials
said.
The government could also deliver another round of tax cuts on
petrol and diesel if crude oil continues to rise that could mean an
added hit of 1 trillion-1.5 trillion rupees in the 2022/23 fiscal
year started on April 1, the second official said.
Both the officials did not want to be named as they are not
authorised to disclose the details.
The government did not immediately comment outside office
hours.
One of the officials said the government may need to borrow
additional sums from the market to fund these measures and that
could mean a slippage from the its deficit target of 6.4% of GDP
for 2022-23.
The official did not quantify the amount of borrowing or fiscal
slippage saying it depended on how much funds they eventually
divert from the budget in the fiscal year.
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