Union Finance Minister Nirmala Sitharaman has emphasized the government’s vigilance in observing the ongoing crisis in West Asia and its repercussions on India’s economy, particularly in relation to fuel, fertilizers, and foreign exchange reserves. Speaking at a commemorative event for the Small Industries Development Bank of India, Sitharaman expressed concern over the escalating prices of crude oil and fertilizers, noting that these have reached unprecedented levels and are exerting additional pressure on the economy. She also pointed out the impact of rising gold prices.
Despite these external challenges, Sitharaman reassured that India’s economic fundamentals remain robust. She cautioned against unwarranted panic and emphasized that fearmongering would only exacerbate the situation during this period of global uncertainty. Sitharaman underlined the importance of sustaining public confidence by adhering to prudent policies and clear communication, stating that the current economic pressures are largely externally induced.
In response to these challenges, the finance minister highlighted the government’s recent decision to reduce excise duty on petrol and diesel. While this measure would result in a revenue loss of nearly ₹1 lakh crore, it was deemed necessary to alleviate the financial burden on consumers. Additionally, Sitharaman drew attention to the issue of delayed payments to micro, small, and medium enterprises (MSMEs), revealing that approximately ₹8.1 lakh crore is still pending. She urged public sector enterprises to expedite MSME payments within the mandated 45-day window.
The tensions surrounding the Strait of Hormuz, a significant global shipping lane, have raised concerns about potential disruptions to India’s imports of petroleum products and fertilizers. This instability has led to a notable increase in fuel prices; state-run oil companies raised petrol and diesel prices once more on Monday, with a total increase of over ₹7 per litre since mid-May. In light of these developments, Prime Minister Narendra Modi has also called on citizens to exercise prudence in spending and refrain from non-essential purchases amid the global economic uncertainty linked to the West Asia conflict.