The government is considering a strategic approach to address the increasing costs of food and fuel by potentially reducing taxes on petrol prices and easing import tariffs on items like cooking oil and wheat. Informed sources have revealed that government officials are exploring the option of reallocating funds from various ministries’ budgets, amounting to as much as Rs 1 lakh crore.
Following Prime Minister Narendra Modi’s recent pledge to curb the rising inflation during his Independence Day address, this development has occurred. In the upcoming weeks, Prime Minister Modi is expected to decide on the reallocation of finances. According to insiders, the planned changes may include lowering fuel prices and lowering import duties on wheat and cooking oil.
Inflation has posed a persistent challenge for India since 2022, with only a brief respite from February to June this year. Should the government opt for new measures to counter inflation, it would mark the second consecutive year of adjustments aimed at addressing this issue.
The impact of inflation extends beyond fuel prices, affecting households through the elevated costs of commodities like tomatoes, fruits, vegetables, milk, and essential cereals such as rice and wheat. These factors have contributed to India’s retail inflation reaching a 15-month high.
Analysts, including the Reserve Bank of India (RBI), anticipate that inflation will remain elevated in the months ahead. Elevated inflation could present a significant challenge for the government, especially as crucial assembly elections are on the horizon, leading up to the pivotal general elections.
The escalation of inflation could significantly impact the lower-income population, historically supportive of the ruling party due to its emphasis on welfare initiatives and rural development.
