18.03.2020 (India Today) - India, which has been battling a financial crisis long before coronavirus became a substantial threat, could see the economy shrink further due to the fast-spreading virus.
Facing a sharp revenue crisis due to the novel coronavirus outbreak, the Indian government has dropped at least three key policy initiatives, reported news agency Reuters.
One of the key policy was about lowering import taxes on vegetable oils, sources told the news agency.
India, which has been battling a financial crisis long before coronavirus became a substantial threat, could see the economy shrink further due to the fast-spreading virus.
For instance, income tax revenues contracted from 3.5 per cent in the first 11 months of the current fiscal year. Income from other taxes, on the other hand, grew marginally by 3.8 per cent, as per the finance ministry’s response in parliament this week.
Earlier in January, the food ministry has proposed lowering import taxes on crude and refined vegetable oils, including palm oil, by 3.7 per cent to keep domestic prices in check. However, the key policy has been dropped as India faces an elevated revenue crunch.
Not just import duty on vegetable oils but the finance ministry has also dropped another proposal by the food ministry; it was aimed at raising the supply of high subsidised rice and wheat to millions of Indians under the world’s biggest welfare programme, sources told the publication.
The finance ministry has also dropped another plan proposed by the food ministry to give vitamin-fortified rice to millions of poverty-stricken people. The proposed plan would have cost Rs five trillion, sources added.
While the finance ministry has not yet commented on the matter, lowered revenue combined with the impact of coronavirus outbreak in India is likely to slow down several key policies and schemes.
Taking the aforementioned factors into consideration, the finance ministry has asked all other departments/ministries to avoid any new proposals and curb non-essential expenditures as quickly as possible.