RBI Governor Sanjay Malhotra
The impact of the ongoing conflict in West Asia is now visible on India’s economy as well. Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that if this tension continues for a long time, the prices of petrol and diesel may increase in the country. At present, the government and government oil companies are bearing the burden of rising crude oil prices, but it will not be easy to continue this situation for long.
In an international conference organized in Switzerland, Malhotra said that the government has reduced the excise duty and the government oil companies are also not passing the full burden on the customers while bearing the loss. But if the war and tension drag on, the price rise may reach the common people.
PM Modi appealed for savings
Meanwhile, Prime Minister Narendra Modi has also appealed to the people to save fuel and reduce unnecessary expenses. He especially advised to use less petrol and diesel and to postpone the purchase of gold, so that the country’s foreign exchange reserves can be kept safe. The government has also increased the import duty on gold by more than double. It is believed that in the coming days, more steps can be taken to reduce the demand for imported goods.
increasing pressure on inflation
Retail inflation in India increased to 3.48 percent in April, whereas it was 3.40 percent in March. Although this figure was less than expected, but experts say that if crude oil prices continue to rise, the pressure on inflation may increase further.
The supply chain is also being affected due to tension in West Asia. Problems in freight transportation and oil supply have started increasing, the impact of which may be visible on the Indian market in the coming months.
RBI will keep an eye on the situation
RBI has estimated India’s growth rate to be 6.9 percent for the current financial year and has expected inflation to be an average of 4.6 percent. However, many economists believe that if the war continues for a long time, economic growth may slow down. RBI had kept the repo rate constant at 5.25 percent in April. Governor Malhotra said that the Central Bank is now taking decisions on the basis of economic data coming in every meeting. He made it clear that if the effect of inflation persists for a long time, then RBI will not shy away from taking necessary steps.
