Speaking at the 12th High-Level Conference on the International Monetary System, jointly convened by the International Monetary Fund and the Swiss National Bank, the RBI Governor referred to the sharp increase in the international price of crude and said the government has so far absorbed a significant part of the burden by keeping pump prices of petrol and diesel unchanged, reducing duties and allowing only marginal increases in some controlled prices such as gas.
He indicated that the current situation may not be sustainable indefinitely if disruptions persist further.
“But if this is to continue for a longer period of time, it’s already, you know, about 75 days… I believe that the government, it’s, you know, it’s a matter of time that the government will actually pass on some of these price increases,” he said.
Malhotra also said the government has remained fiscally prudent and continued on the path of fiscal consolidation, bringing down the fiscal deficit from 9.2% of GDP during the pandemic period to nearly 4.3%.
