Finance Minister Sitharaman gets talking on Adani, Russian oil buys, jobs and crypto

India’s Finance Minister Nirmala Sitharaman said the South Asian nation could buy Russian crude oil near or past the price cap imposed by the G-7 if the recent OPEC+ output cut increases energy costs.

“We will have to constantly re-figure where we get the best deal as it is a critical input for the economy,” Sitharaman said in a wideranging interview, adding that the nation will look at “affordable prices” to serve its large population.

From the sidelines of the International Monetary Fund Spring meetings in Washington, Sitharaman shared her views on India’s economic challenges, the lack of jobs, the Adani-Hindenburg saga and the government’s weak progress on privatization. Below are edited excerpts and the video conversation.


Growth

“We are making enough efforts to make sure the economy remains buoyant,” Sitharaman said. External factors, including the OPEC+ output cut and “the spillover of all the decisions” related to Russia’s war in Ukraine are “the two main things which I think I’d be more worried about than anything internal.”

She also said weakness in demand for manufacturing goods and services activity could be a drag on India’s recovery going forward.

RBI’s Pause

The Reserve Bank of India has found reasonable justification to pause for now, Sitharaman said. “They are keeping a very close eye on the economy and business leaders have welcomed this pause with a sense of relief.”

The central bank has given a hawkish outlook for India’s inflation, but the price-gain trajectory will depend of monsoon rainfall going ahead, she said.

Fiscal Glide Path

“We hope to continue on the glide path,” she said, adding that the government will adhere to the budgeted target of 5.9% for the fiscal year starting April. “We have been careful.”

Privatization

In India, privatization goes through a whole lot of filters as all stakeholders have to be kept together, Sitharaman said when asked about the slow progress of stake sales in state-run firms. “The idea is not to close units down, it’s more that the government wants to get out of businesses where more equity is not possible but there’s interest outside and the economy will benefit if the companies are kept as going concern, so those considerations do take time.”

Sitharaman said the upcoming national elections may pose a hurdle. “Bids come in after a certain level of certainty comes in,” she said.

Adani Saga

“Government of India stays at a distance from companies,” the minister said, adding that a Supreme Court-monitored panel will probe allegations made by the US short-seller Hindenburg Research against the Adani Group. “We think it may be inappropriate to comment even as the judiciary is having a look at it.”

Job Creation

“The emphasis now is to fill vacant jobs that have already been sanctioned or available in the government,” Sitharaman said. There’s a lot of skilling happening in the private sector, she said.

Cryptocurrency

More reports show that cryptocurrencies have macro-stability implications, Sitharaman said. If there’s a consensus among G-20 members, “we will look at a broad framework and will leave it to each country to adopt their own legislative framework,” she said.