Finance Minister Nirmala Sitharaman said on Sunday that Union Budget numbers for the current fiscal year might not need to be tweaked as of now, adding that there are sufficient buffers to deal with challenges arising from the war in West Asia.
“Budget numbers, I don’t think I need to reconsider as of now, because enough funds have been created to meet all these challenges, whether it’s rising risk insurance premiums, support for our oil containers or shipping lines,” Sitharaman said at an event organised by a TV news channel in Mumbai. “We’ve made a provision, there is some resource kept aside for it,” she said.
The government has kept similar buffer for importing oil and fertilisers at higher prices, which will limit the pass-through to farmers, Sitharaman said.
The government earlier this year created a Rs 1 lakh crore Economic Stabilisation Fund to deal with unexpected global shocks. Officials have previously said the government may dip into this fund if required to meet the fiscal deficit target of 4.3% of GDP for 2026-27.
Inflation Risks
Sitharaman also said inflation is likely to rise not just because of the impact of the West Asia war, but also due to deficient rainfall so far this monsoon. CPI inflation rose to an 18-month high of 4.38% in June, led by higher food and fuel prices.
“I would have said, because of external factors, inflation (may rise). But also, this year, there is an El Nino factor,” Sitharaman said. “The rains are happening excessively in some parts, scarcely in some others, not at all somewhere else. The catchment areas are not receiving adequate rains. So, water for irrigation and drinking, crops, all of them are also going to post a bit of a challenge,” she said. Inflation, therefore, cannot be just imported. Monsoon being less than normal can also add to the inflation,” the minister said.
Private Investment
She said that investment by the Indian industry is improving. “In fact, it’s very encouraging to know that they are investing in sectors which are very critical to India’s Aatmanirbha Viksit Bharat. I would certainly invite industry to engage with the government and see if there are any points of concern or any further facilitation that would be needed, and I would only invite for greater engagement with the government,” the minister said.