revision to boost the revenue of the Centre and states is likely to be delayed due to a spike in inflation, and the Centre is examining ways to tame prices, including by improving logistics for commodities such as cement, a government official said on Wednesday.
The government will also continue to take steps to iron out the mismatches in the procurement of pulses and oilseeds to contain inflation and ensure that infrastructure projects are fully funded even if proceeds from cesses that back these projects fall short, the official said on condition of anonymity.
The official also said that the central government would stick to the FY23 gross market borrowing of ₹14.3 trillion for now.
The Narendra Modi administration, which was banking on a healthy economic recovery this year, is now scrambling to contain the economic fallout of the Russia-Ukraine war and the steps taken by China to contain covid, which have sent energy and commodity prices soaring and curtailed supply of raw materials and intermediates for businesses.
Surging retail inflation, which soared to an eight-year high of 7.79% in April, has forced the central government to cut taxes on fuels, imported edible oils and raw materials for steel and petrochemical production, ban the export of wheat, impose a limit on sugar exports and levy export duty on iron and steel intermediates. The government also raised the fertilizer subsidy for this fiscal to offset the rising costs of soil nutrients.