Finance Minister Nirmala Sitharaman has said the government is worried about exports, especially from the farm sector, in view of the geopolitical uncertainties in the eastern Europe.
During a post-budget discussion with industry stakeholders on Monday, she said the Russia-Ukraine crisis has got the government particularly worried about outward shipments and her ministry is getting a comprehensive assessment done on the impact of the conflict in discussion with various ministries.
The finance ministry is also looking at the issues around both new exports and payments for the items already exported, she added.
“We are rightly worried about what comes from there, but I am more worried, if not equally, about what’s going to happen to our exporters who are doing very well, especially those in the farm sector,” a TOI report quoted Sitharaman as saying.“You can be assured that we are fairly seized of the matter in its granular form because it’s going to have an impact on the essentials like edible oils and fertilizers, among others,” Sitharaman said.The latest statements assume significance in the wake of the Russia-Ukraine conflict and subsequent restrictions on Moscow under SWIFT as exporters are apprehensive that their payments may be held up.
The finance minister also sought industry feedback on any difficulties in payments due to the conflict.
It is said that the export volumes are not significant in terms of shipments to Ukraine and Russia, but some of the imports such as fertilisers may be impacted.Later, speaking at another event, she said every war is a challenge and the development in Ukraine is a big one.Responding to a question on surging crude oil prices, she said, “While no assessment can be made now, we will analyse the impact based on developments.”
Global crude oil prices have crossed USD 100 a barrel, putting pressure on domestic oil marketing companies to raise petrol and diesel prices — a move that will see inflation going further up. Already, several commodities have seen a sharp rise in their prices.
Amid the troubles Indian students are facing in Ukraine, the education industry has sought an increase in the spendings on the sector from the current levels of around 3.5 percent of GDP to around 6 percent, and thus ensure that students don’t have to study abroad and face such a situation.
Responding to the query, a top finance ministry official said that the tax to GDP ratio needs to improve substantially to do that.
“To meet the demands of the industries, our tax to GDP ratio has to double…,” T V Somanathan, finance secretary, said.
To this query, Sitharaman responded, “I take your concerns very seriously, Prime Minister Modi has also said about increasing seats at higher education levels, but we have resource limitations and the tax base needs to be widened.”Answering a query from the jewellery sector to increase limits on digital payments from Rs 1 lakh to Rs 2 lakh, she said the NPCI is looking into the matter.
