Keeping close watch on crude oil prices, global developments: FM

Amid escalating tensions between Russia and Ukraine, Finance Minister Nirmala Sitharaman on Tuesday said the government is keeping a close watch on the developments as well as crude oil prices. She added that there was no need for extraordinary measures as of now.

The government will also go ahead with the Life Insurance Corporation of India’s (LIC) IPO despite market volatility. “LIC IPO has been very eagerly waited. We are on course and moving forward,” Sitharaman said, addressing a press conference in Mumbai.

She noted that the draft red herring prospectus for LIC is out and has created a lot of “buzz” in the market. “… we will go ahead with it. DRHP is not issued two years in advance,” she said when asked if the IPO will take place in this fiscal.

Global cues

The minister attributed the current market volatility to global issues. “The government is keeping a tab on global developments,” she said. The Financial Stability Development Council, which met on Tuesday, also looked at the challenges posed for the financial stability.

“Crude was one of the things. The worrisome international situation, where we have voiced a diplomatic solution for the situation in Ukraine … all these are headwinds,” she said.

“The Council deliberated on the various mandates of the FSDC and major macro-financial challenges arising in view of global and domestic developments,” said an official statement. The global situation is leading to rising prices of fuel as well as supply challenges, she added.

“We will have to see how it goes. It is very difficult to say how crude oil prices will move,” she said in response to another question, while also adding that an impact on trade was yet to be felt.

“Our exporters are also fairly mindful of what is happening. MEA is in touch with all the countries around the area. Overall our attempt is to get a diplomatic solution so that tension comes down and trade is not impacted,” she said.

NSE fiasco

On the developments related to the NSE scam, Sitharaman said she is studying the lapses but declined to comment further.

“Although you would perceive that charges involving NSE matter are well-established, I do not want to pre-empt the matter. I am going through the details and come back after that,” she said in response to another question, adding that the Finance Ministry will hold a press conference then.

Sitharaman also said the shortlisting of names for a new SEBI chief is yet to take place. “The process of calling for applications has already happened … shortlisitng probably is yet to happen. You will have to wait till the 28 th to know what we will do on it,” she said. The government is also keen to appoint a new IRDAI chief soon.

Fiscal deficit

Meanwhile, replying to another question, Economic Affairs Secretary Ajay Seth said the fiscal deficit will be within 6.9 per cent of the GDP. “The government is committed to fiscal deficit within 6.9% and whatever has been planned on the expenditure side in the Revised Estimate, ts happening in the normal course,” he said, adding there won’t we any surprises fn government borrowing.

Earlier, in the day, the Finance Minister also chaired a post-Budget meeting with heads of banks, NBFCs and other financial institutions. “Underscoring the importance of information sharing and collaboration, the Finance Minister exhorted all the banks to sign up to the Account Aggregator model which would facilitate seamless flow of credit for small borrowers and promote digital lending,” said a statement.

The way forward for stepping-up the lending activity and building a conducive credit environment for businesses and individuals was also stressed upon in the meeting, it further said.

Published on

February 22, 2022