Industry Odisha Bureau, March 28: While the value of Indian currency (INR) is already on a depreciation spree against the reportedly robust value of dollar (USD) at least since last fiscal year of 2025-26 (FY25-26), and further being battered by the soaring global energy prices triggered by the ongoing Persian Gulf standoff, the ICRA has reportedly flagged that there is every possibility of a mounting pressure on Indian government’s fiscal health condition in the FY26-27.
ICRA’s report has also hinted at the possible stress and strain on Indian government’s revenue collections like “softer excise collections” and “lower corporate tax inflows”.
The ICRA report noted: “The geopolitical tensions have driven volatility to global markets and could require adjustments in fiscal policy. Even if the situation stabilises, energy prices are expected to remain higher than earlier budgeted assumptions, which may require fiscal adjustments.”
ICRA also predicted: “Higher prices of crude oil and gas may increase subsidy burdens, especially for liquefied petroleum gas (LPG/cooking gas) and fertilisers.”
ICRA has, however, suggested mechanisms like “Economic Stabilisation Fund (ESF), expenditure savings and supplementary demand for grants” in order to manage the impact of the challenges being thrust on the fiscal positions as well as “contain any significant deviation from the fiscal deficit target of 4.5 per cent of GDP for FY2026-27.”
Notably, ICRA (Investment Information and Credit Rating Agency of India Limited) is affiliated with Moody’s Investors Service, and it evaluates the creditworthiness of companies, banks and financial instruments.
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