NEW DELHI- The Indian government is considering spending an additional 2 trillion rupees ($26 billion) in the 2022/23 fiscal year to cushion consumers from rising prices and fight multi-year high inflation, two government officials told Reuters.
The new measures will be double the 1 trillion rupees hit government revenues could take from tax cuts on petrol and diesel the finance minister announced on Saturday, both the officials said.
India’s retail inflation rose to an eight-year high in April, while wholesale inflation rose to at least a 17-year high, posing a major headache for Prime Minister Narendra Modi’s government ahead of elections to several state assemblies this year.
“We are fully focused on bringing down inflation. The impact of Ukraine crisis was worse than anyone’s imagination,” one official, who did not want to be named, said.
The government estimates another 500 billion Indian rupees additional funds will be needed to subsidize fertilizers, from the current estimate of 2.15 trillion rupees, the two officials said.
