The government is exploring all viable options, including import diversification, to procure crude at an affordable price, said the Ministry of Finance on April 7. The present price levels of international crude price, should it persist for long, may come in the way of India achieving real economic growth rate of 8 percent in FY23.
The Indian economy has swiftly recovered in 2021-22, after the pandemic induced contraction and may prove resilient owing to the government’s thrust on capital expenditure and the corporate sector’s improved financial health.
However, geopolitical conflicts and their impact on food, fertiliser and crude oil prices have cast a cloud on growth outlook globally, and India may also feel its impact.
The magnitude of impact will depend upon:
How long the dislocations in energy and food markets persist in financial year.
How resilient India’s economy is to mitigate the impact.
However, transient shocks may not have a big effect on real growth and inflation.The economic fallout of Russia- Ukraine crisis is gradually unfolding and has led to the prices of international fertilisers stabilising at higher than pre-conflict levels. Eventually, the prices may fall depending on the global dynamics. At present, the economy is benefiting from continued growth momentum in agriculture.
The first advance estimates of production of horticulture crops for 2021-22 indicate increase in sown area of both fruits and vegetables. It is expected that the constant increase in acreage under summer crops, crop diversification and increase in procurement during the ongoing kharif market season (KMS) 2021-22 will boost income levels in the rural economy.
(Edited by : Anand Singha/Shoma)
First Published: Apr 7, 2022 7:08 PM IST
