Union Finance Minister Nirmala Sitharaman on Monday said the government is carefully monitoring the impact of the ongoing West Asia conflict on India’s economy. She said the Centre is paying special attention to the “3Fs” — fuel, fertiliser and foreign exchange reserves.
Speaking at an event marking the 37th anniversary of the Small Industries Development Bank of India, Sitharaman said India’s economic fundamentals remain strong despite growing global uncertainty.
She added that the government has adopted a balanced policy approach to protect economic growth while dealing with external pressures.
Excise Duty Cut To Cost Government ₹1 Lakh Crore
The finance minister said the Centre’s recent decision to reduce excise duty on petrol and diesel would lead to a revenue loss of nearly ₹1 lakh crore. She warned that rising crude oil prices and a sharp increase in fertiliser costs are creating major challenges for the economy.
According to Sitharaman, fertiliser prices have reached “unimaginable” levels. She also pointed to rising gold prices as another concern affecting India’s external sector. “There is a need to focus on the three Fs of fuel, fertiliser and forex,” Sitharaman was quoted as saying by PTI.
Sitharaman Warns Against Fearmongering
The finance minister also criticised what she described as attempts to spread pessimism about India’s economic situation. Without naming anyone, she said some “naysayers” were ignoring positive developments and creating a negative narrative around the economy.
“'All the good that is being done by the common people themselves, that is forgotten. And a pessimistic, cynical narrative is generated, which is just not right,” she said.
Sitharaman stressed that most of the current economic difficulties are being caused by global developments rather than domestic weaknesses.
“We should appreciate that the challenges are more externally driven. We must also recognise that India's domestic economic situation remains positive and resilient even today,” the FM said.
“India cannot afford fearmongering. We need to give confidence to the people with our words and with our actions,” she added.
Government Raises Concern Over MSME Dues
Sitharaman also highlighted the issue of delayed payments to micro, small and medium enterprises. She said nearly ₹8.1 lakh crore remains stuck due to pending dues owed to MSMEs.
The minister urged public sector undertakings to clear payments within the mandatory 45-day deadline and avoid unnecessary delays.
West Asia Conflict Affecting India’s Economy
The ongoing conflict in West Asia is beginning to impact India’s fuel prices and import outlook. The government has already indicated the need for careful spending as global uncertainty continues to rise.
Earlier this month, Prime Minister Narendra Modi urged citizens to spend carefully and avoid unnecessary expenses such as buying gold or planning foreign trips.
Strait Of Hormuz Closure Raises Fresh Concerns
The closure of the Strait of Hormuz has raised fears over disruptions in the supply of petroleum products and urea, both of which are critical imports for India.
Fuel prices have also increased sharply over the past two weeks. State-run oil marketing companies on Monday raised petrol prices by ₹2.61 per litre and diesel prices by ₹2.71 per litre. Since May 15, petrol prices have increased by around ₹7.35 per litre, while diesel prices have gone up by nearly ₹7.53 per litre.