New DelhiFinance Minister Nirmala Sitharaman on Tuesday risked undoing some of the progress India has made towards climate commitments and being forced to switch to coal-based power in the light of skyrocketing international gas prices.
Speaking at The Brookings Institution in Washington, USA on the topic ‘India’s Economic Prospect and Role in the World Economy’, the Finance Minister highlighted that energy availability and prices, and fertilizer prices are the two major risks facing the Indian economy. were, saying that they were external to the Indian economy at their core.
The Finance Minister is on an official visit to the US during which she will attend the annual meetings of the International Monetary Fund (IMF) and the World Bank, the G20 Finance Ministers’ Meetings and the Central Bank Governors (FMCBG). ,
“At a time when all economies globally are trying to participate in climate-related risks and have committed themselves during various Conference of the Parties (COPs)-21, 22 etc., as recently ScotlandYou are looking at a transitional phase where you wanted natural gas to come in,” Sitaraman said during a fireside chat with Brookings senior partner Ishwar Prasad.
She further added: “India has proved that it has set the national level” commitments, as given in Paris, and it will continue to do so and the Paris commitments were fully and completely met with our own resources. But at this stage, if natural gas is going to be beyond our means, then obviously you’re looking to go back to coal to some extent because you need a base level of electricity and that’s solar or wind power. cannot be done through ,
According to information In 2011, India met about 72 percent of its natural gas demand through domestic production, from the Petroleum Planning and Analysis Cell of the Ministry of Petroleum and Natural Gas. The remaining 28 per cent was imported.
By 2021, imports made up about 50 per cent of India’s natural gas consumption, increasing India’s exposure to external risks such as the ongoing war in Ukraine.
natural gas price in india spiked In recent years, the increase in 2022 has been attributed to supply shortages due to the crisis involving Ukraine and Russia.
“So, you have given your commitment, you have proved that you can meet the commitments, but now you risk going back to thermal power,” Sitharaman said. “And this is not just a dilemma for India, it is a dilemma for many countries. So it is a big challenge for us in the immediate and medium term as well.”
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Fertilizer Another Risk
Speaking about other risks, the Finance Minister highlighted the fiscal cost being borne by the government due to high fertilizer prices.
“India is a country that successfully produces almost everything that we consume and are in a position to export, be it milk, vegetables, fruits, coarse cereals,” Sitharaman said. “All these are produced abundantly in India. But we need fertilisers.”
He continued: “Our soil is quite tired in some parts. Fertilizer is a big risk. Last year, we had to pay 10 times the price for imports and obviously Indian farmers are still not really big farmers. Many of them have barely enough land from which they produce. They need fertilizer at affordable cost. I cannot increase the input cost by saying that I am importing it at this price so you have to take it as well as bear the burden. ,
So, to free the farmer from the burden of rising fertilizer prices, the government to bore Increase in prices, leaving the price paid by farmers unchanged. This means that the government’s fertilizer subsidy bill will be in the financial year 2022-23. potential balloon Over Rs 2.15 lakh crore from Rs 1.62 lakh crore in the previous year.
development oriented budget
Speaking on other issues, the Finance Minister said India’s Budget 2023 will have to balance how to manage growth in the face of high inflation.
“The details (of the next Budget) at this stage may be difficult as it is a bit early,” Sitharaman said. “But broadly speaking, growth priorities will be completely over the top, even when I speak about the concerns that inflation brings to me. Therefore, inflation concerns have to be addressed. But then how you will manage the growth will be a natural question.
She added: “But it’s a matter of making sure how you’re going to be able to balance the two and make sure that the pace at which the Indian economy is coming out of the pandemic and the pace at which it will continue to grow next year.” Even according to many multilateral institutions that are looking at India, they cannot be weakened.”
UPI in other countries
Responding to a question from the crowd, the Finance Minister said that Singapore and the UAE have expressed interest in India’s payment network and are in talks to accept the RuPay payment system in their countries.
“Not just that, UPI (Unified Payments Interface), BHIM App and NPCI (National Payments Corporation of India) are all now being made to work in such a way that their systems are in their respective countries, no matter how strong or Otherwise, we can talk to our systems and inter-operability will only strengthen the expertise of Indians in those countries.”
(Edited by Polomi Banerjee)
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