Government ready to take more measures to insulate economy

NEW DELHI: The Centre is ready to take more policy measures to help insulate the economy from the adverse impact of the West Asia conflict and will phase it out instead of rushing with announcements.

The focus of these steps will be to ensure that there is enough availability of goods, raw material, inputs and finished products, to meet the domestic requirement, while seeking to provide stability to the Indian currency and foreign exchange flows.

"More steps will be announced. We will respond with more measures, as and when required," said an official.

In the last six years, starting with Covid-19, govt has had to deal with multiple challenges, including the Russia-Ukraine conflict and disruptions in sea routes after the hostage crisis in Israel and govt has opted to respond in multiple ways. Unlike, Covid, when govt and RBI clubbed a series of measures and announced them in batches, the response this time has been to address issues as and when they emerge.

Just this week, apart from the coordinated policy measures by govt and RBI to step up overseas investment in govt bonds and other instruments, the Centre cleared a package for airlines to shield them and oil companies from the impact of high crude prices.

Govt officials said concerns related to supply of petrochemicals and cotton were also addressed and at the moment there aren't too many issues from the manufacturing space. In case of exports, where a package had been announced, first two months of the current fiscal year are said to have seen double digit growth, although trade deficit remains an area of worry, given elevated oil and gold prices. "We are keeping a close watch on it and seem to be fine this quarter," said an official.

Besides, Centre will have to deal with issue of subsidies in the coming months as it has the potential to upset its fiscal calculations due to surging fertiliser prices and cooking gas cylinders for households.