The Government has undertaken a series of administrative measures, including fiscal and trade policy, to control inflation and mitigate its impact on the common citizens.
In a written reply in Lok Sabha today, Finance Minister Nirmala Sitharaman said that the medium-term impact of the global crude oil price rise on inflation depends on several factors, including exchange rate movements, global demand and supply situation, monetary policy transmission and the extent of the indirect pass-through.
She said that the price of both global crude oil and the Indian basket has been on a declining trajectory for the past one year, till the geopolitical clashes commenced in West Asia on the 28th of last month. Mentioning the Monetary Policy Report of the Reserve Bank of India (RBI), she said the report estimated that if crude oil prices are higher by 10 per cent than the baseline assumptions, and assuming full pass-through to domestic prices, inflation could turn out to be higher by 30 basis points.
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