Spill over due to Ukraine crisis is more indirect than direct: CEA Nageswaran

The ongoing geopolitical tension between Russia and Ukraine has led to a sharp rise in the commodity prices and crude oil and that has emerged as a pain point for the global economy. On 48th day of the ongoing conflict, Chief Economic Advisor V Anantha Nageswaran, while speaking at National Leadership Conclave organized by All India Management Association (AIMA), said today, “Spillover because of Russia-Ukraine crisis is likely to be more indirect than direct.” He also added further that the ongoing geopolitical tension between Russia and Ukraine has implication for commodity prices.  

On being asked about the revision in the growth projections mentioned in the economic survey, Nageswaran said, “It is too premature to say that those projections are liable for major revision. If the oil prices stay elevated over $100 per barrel for quite long time, then only these projections need revision.” 

He went to add further that if oil price remains above $110 per barrel for a quarter, the government will have to pass it on to consumers. Nageswaran, throwing light on uncertainties hovering over the Indian economy, also said, “There is a renewal of uncertainty on the geopolitical front. Also, the US Fed increasing interest rate naturally will have implication on the financial markets in USA and the rest of the countries. US Fed aggressive actions are likely to be frontloaded rather than backloaded.” According to Nageswaran, this frontloaded action will give more clarity. 

Nageswaran also added that emphasis on capital expenditure, and a robust corporate balance sheet will enable India to overcome uncertainty.  He added, “Second half of 2022 blue skies will appear and we will witness the sustainable growth that we witnessed during 2001-2003.” 

Talking about the Budget, he pointed out, “The Budget is cleaned up now and is all about what you see and what you get. Revenue and growth assumption are very much realistic.” 

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