Retail inflation rose to an eight-year high in April, while wholesale inflation hit at least a 17-year high.
Retail inflation rose to an eight-year high in April, while wholesale inflation hit at least a 17-year high.
The government is looking at spending an additional ₹2 lakh crore ($26 billion) in the 2022-23 financial year to protect consumers from rising prices and fight multi-year high inflation, two government officials told . Reuters,
New measures could double government revenue of ₹1 lakh crore Finance Minister announced to cut tax on petrol and diesel On May 21, both officials said.
retail Inflation at eight-year high in April, while wholesale inflation Elections to several state legislatures in 2022 reached at least a 17-year high, becoming a major headache for Prime Minister Narendra Modi’s government.
“We are completely focused on reducing inflation. The impact of the Ukraine crisis was worse than anyone could have imagined,” an official said on condition of anonymity.
Both officials said the government estimated that an additional 500 billion would be needed to subsidize fertilisers, from the current estimate of ₹2.15 lakh crore.
The government may also offer another round of tax cuts on petrol and diesel. If crude oil continues to rise, it could mean an additional hit of ₹1 lakh crore-₹1.5 lakh crore in the 2022/23 fiscal year beginning April 1. Might be possible. said the officer.
Both the officials did not wish to be named as they are not authorized 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 funds from the market for these measures and could mean a slippage from the deficit target of 6.4% of GDP for 2022-23.
The official did not quantify the borrowing amount or fiscal slippage, saying it depends on how much money they remove from the budget in a financial year.
As per the budget announcements made in February, the government is planning to borrow a record ₹14.31 lakh crore in the current fiscal.
Another official said the additional borrowing would not affect the planned borrowing of Rs 8.45 lakh crore in April-September and could be taken in January-March 2023.