The Centre remains confident about India's growth outlook despite rising fuel and fertiliser import costs triggered by the Middle East crisis, with official sources telling The Times of India that GDP momentum remains intact. Sources emphasized that domestic consumption is holding up and there is no immediate need for additional borrowing during the current period. The government had already factored in global uncertainties, including tariff-related risks, in the FY27 Budget and there is no proposal at present to seek supplementary grants or raise extra borrowing during the upcoming monsoon session of Parliament.
On the fiscal front, sources confirmed to The Times of India that the government continues to target a fiscal deficit of 4.3% of GDP for the current financial year. The government plans to reassess macroeconomic conditions in July after receiving April-June quarter growth data and a clearer picture of the impact of El Nino on the monsoon. This measured approach reflects the government's commitment to maintaining fiscal discipline while responding to external challenges. Additionally, sources revealed that the government is actively tapping non-tax revenue areas like disinvestment and asset monetisation in the current fiscal, with DIPAM and DPE having a year-long pipeline and medium-term outlook for disinvestment and asset monetisation.
According to sources reported by The Times of India, the growth momentum seen in the January-March quarter of FY26 has continued into the first quarter of FY27, with no adverse impact on remittances so far. This sustained growth trajectory provides a strong foundation for the government's confidence in maintaining economic stability despite global uncertainties. The continuation of positive growth momentum across different quarters demonstrates the resilience of India's economic fundamentals. GST numbers are good, frequency data are also showing up, and private investment is picking up pace, as shown in the data released by CII, sources said.
The Centre is prepared to implement additional policy measures to protect the economy from adverse effects of the West Asia conflict, according to The Times of India. Officials indicated that the government will respond with more measures as and when required rather than rushing with announcements. The focus of these steps will be to ensure adequate availability of goods, raw materials, inputs and finished products to meet domestic requirements while providing stability to the Indian currency and foreign exchange flows.
According to The Times of India, just this week, the government implemented coordinated policy measures by the Centre and RBI to step up overseas investment in government bonds and other instruments. Additionally, the Centre cleared a comprehensive package for airlines to shield them from the impact of high crude prices, along with measures for oil companies facing similar challenges from elevated crude oil prices. The government has provided support of ₹1.23 trillion to oil marketing companies (OMCs) to hold pump prices steady for 78 days since the West Asia crisis, with OMCs still incurring a loss of ₹650 crore per day for selling fuel at a lower rate than the prevailing global crude price. In view of rising fertiliser prices globally, the fertiliser ministry has sought a 100% increase in subsidy for the current fiscal, with the budget having estimated a fertiliser subsidy of ₹1.77 trillion for the current fiscal.
