Centre likely to spend another $26 billion in FY23 to fight inflation

The government estimates another Rs 500 billion additional funds will be needed to subsidise fertilisers, from the current estimate of Rs 2.15 trillion, two officials said

The Centre is considering spending an additional Rs 2 trillion ($26 billion) in FY23 to cushion consumers from rising prices and fight multi-year high inflation, two government officials told Reuters.

The new measures will be double the Rs 1 trillion hit government revenues could take from tax cuts on petrol and diesel the finance minister announced on Saturday, both the officials said. “We are fully focussed on bringing down inflation. The impact of Ukraine crisis was worse than anyone’s imagination,” an official said.

The government estimates another Rs 500 billion additional funds will be needed to subsidise fertilisers, from the current estimate of Rs 2.15 trillion, the two officials said. The government could also deliver another round of tax cuts on petrol and diesel if crude oil continues to rise that could mean an added hit of Rs 1 trillion-1.5 trillion in the FY23, the second official said.