India's Nirmala Sitharaman says govt can meet higher fuel, fertilizer subsidies

Finance Minister Nirmala Sitharaman told a business leadership event that the Middle East conflict has pushed up India’s petroleum and fertilizer subsidy bills as global prices surged, but the government retains sufficient buffers to absorb the costs without altering the 2026‑27 budget estimates. She said resources have been set aside for higher risk‑insurance premiums on shipments through war zones and noted that a deficient monsoon adds to inflation pressures.

Sitharaman pointed to strong GST collections as a sign of resilient growth, and the RBI continues to forecast a 6.6 % expansion for 2026‑27 despite supply‑chain disruptions from the Iran war and agricultural impacts. The original FY27 allocation for fertilizer subsidies was about Rs 1.71 lakh crore, now expected to rise sharply owing to higher prices for urea, DAP and natural gas. State‑run oil marketing firms Indian Oil, BPCL and HPCL have received almost Rs 1.23 lakh crore in assistance to keep retail fuel prices stable, while the LPG subsidy is projected to exceed Rs 1 lakh crore.