India facing twin deficit problem due to commodity prices

•  The finance ministry on Monday cautioned the re-emergence of the twin deficit problem in the economy, with higher commodity prices and rising subsidy burden leading to an increase in both fiscal deficit and current account deficit.
• As government revenues take a hit following cuts in excise duties on diesel and petrol, upside risk to the budgeted level of gross fiscal deficit has emerged.
• An increase in the fiscal deficit may cause the current account deficit to widen, compounding the effects of costlier imports, and weaken the value of the rupee.
• Further aggravating external imbalances, creating the risk of a cycle of wider deficits and a weaker currency.
•  India’s fertiliser subsidy bill for FY23 could rise to around Rs 2.5 trillion against the Budget Estimate of Rs 1.05 trillion because of a global supply shortage amid the war in Ukraine.