(FE)
As the Prime Minister’s Office (PMO) and finance ministry held busy preparatory meetings on Friday ahead of the weekend’s crucial review of the economy by Prime Minister Narendra Modi, it was clear that the government would avoid being seen jittery over the recent slide of the rupee or the pressure on the twin deficits. Rather than any haphazard, overblown reaction to the currency volatility — even as the rupee has turned out to be Asia’s weakest currency in 2018, economists reckon that it has undergone only a natural correction after being overvalued for long — what could come out of Saturday’s meeting is a rejigging of the government’s expenditure priorities and a calibrated plan to check import surges in certain items to rein in the current account deficit (CAD).
Official sources maintained that a cut in excise taxes on fuel was not on the agenda, given the need to maintain fiscal produce and keep budget spending strong when elections were around the corner and a capacity overhang that continued to hamper private-sector investments.
