Russia-Ukraine Crisis, Crude Oil Posing Challenge To Financial Stability: Nirmala Sitharaman

Finance minister Nirmala Sitharaman on Tuesday refuted Shiv Sena’s claims that central agencies like Enforcement Directorate (ED) were being used to settle political scores.

On Russia and Ukraine crisis, she said the impact of the prevailing situation on oil prices were posing challenges to financial stability.

“On the crude prices, it is very difficult to say how it will go. Even today in the FSDC (Financial Stability and Development Council), when we were looking at challenges to financial stability, crude was one of them. International worrisome situations… all these are headwinds,” said Sitharaman, adding that on Tuesday, Brent crude prices were in the range of around $96 per barrel.

The high prices (of oil) are not the only problem, supply shortfall is also a challenge, Sitharaman said. The finance minister, however, said that the impact of the Russia-Ukraine tensions on trade was yet to be felt.

Speaking to reporters after a stakeholder interaction organised as part of the post-budget outreach, Sitharaman said the government is examining if the Securities and Exchange Board of India (SEBI) has taken adequate punitive action in the alleged irregularities at the National Stock Exchange (NSE) during the tenure of its then managing director and chief executive officer Chitra Ramakrishna.

“I have no comment to make on whether there was an adequate correctional step in the sense of penalising or anything taken against those who were held responsible for it. I have no view this way or that way till I get to the bottom of what is available. I am looking into it, but I won’t be able to comment on whether it was enough or not… I do not want to give a pre-emptive reply,” said Sitharaman on the NSE scam.

She also denied allegations that the ED was being used to take politically motivated action. “Even if the ED wishes to do something for political or any other (purposes), it is not possible. Unless you have the material before you that is substantive enough, the ED cannot go there… It requires so much work, and without that ground-work in their hand, they cannot enter anywhere,” she said.

“If the investigating agencies were being used for suppressing them, the three met and gave open statements. Then, what is the use of this pressure?” she asked, referring to the meeting between Telangana chief minister K Chandrashekhar Rao, West Bengal chief minister Mamata Banerjee and their Maharashtra counterpart Uddhav Thackeray.

She also charged that in West Bengal, the police were being used to harass opposition workers.

She was, however, non-committal when asked about whether the Life Insurance Corporation (LIC) IPO could be delayed or spill over to the next fiscal. “The DRHP (Draft Red Herring Prospectus) is not issued two years in advance,” said Sitharaman.

On the Goods and Services Tax (GST) issue, She said, “Compensation was disbursed as per the proportion decided by the GST council in 2020. Maharashtra deputy chief minister and finance minister Ajit Pawar was heading a group of ministers in the GST council.” Sitharaman denied that there was a shortfall or delay in the devolution of these funds to the state.