FM Sitharaman says India prioritized national interest in importing cheaper fuel amid global commodity price spike - Business News, Finance News, Share Market News - Market trendz

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Wednesday 1 March 2023

FM Sitharaman says India prioritized national interest in importing cheaper fuel amid global commodity price spike

 FM Sitharaman says India prioritized national interest in importing cheaper fuel amid global commodity price spike.

 


India's Finance Minister, Nirmala Sitharaman, has stated that India made decisions to import cheaper fuel from Russia and other available sources to prioritize the country's interest amid the recent spike in global commodity prices caused by the Russia-Ukraine conflict. Russia's share in India's crude oil import basket rose to a record 28% in January, compared with only 0.2% before the Russian invasion of Ukraine in February 2022. With high commodity prices dampening India's growth story and inflating inflation, India could not afford to abandon Russia as a cheaper source of fuel, despite the tough economic sanctions imposed on Russia by the US and its allies. Sitharaman noted that India did not come under any pressure and made sure that affordable fuel reached India.

 

The government also had to double the budget allocation on fertilizer subsidies to insulate farmers from a sharp increase in global prices. Sitharaman highlighted that when global fertilizer prices hit the roof, the Modi government faced the spike in fertilizer prices in the last few years by enhancing the budget outlay on subsidies to ensure that farmers were not starved of fertilizer that their land needed. The total fertilizer subsidy bill estimated for FY23 is Rs 2.25 trillion, which is more than double the budget estimate of Rs 1.05 trillion and the actual Rs 1.54 trillion (including dealer and manufacturer) in FY22.

 

Sitharaman also discussed the importance of being prepared to deal with global economic uncertainties, stating that being prepared is also a question of how much can one predict what is going to happen, and even if one can't predict it, will you be able to manage? The Modi government had to make provisions in the budget to deal with the unforeseen spike in fertilizer prices. Overall, the government has prioritized the country's interests in importing cheaper fuel and ensuring that farmers are not deprived of essential fertilizers, even in the face of global commodity price spikes caused by geopolitical conflicts.

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