Time for us to think of wartime fuel policy: Shamika Ravi on PM's austerity call

In an interview with India Today, Dr. Shamika Ravi, a member of the Economic Advisory Council to the Prime Minister, discussed the Indian economy's health seventy days into the US-Iran war. Addressing the Prime Minister's appeals to citizens to reduce consumption of foreign travel, gold, and cooking oil, she stated, "it's time now for us to also begin to think of a wartime fuel policy." Dr. Ravi explained that India's demand for petrol and diesel is highly price inelastic, meaning a price rise of two hundred to three hundred percent would be needed to significantly reduce consumption. She noted that passing on price shocks has a regressive distributional impact on farmers and truckers. Consequently, the government is utilising quantity controls and public appeals rather than immediate price hikes. Regarding gold, she highlighted that retail consumption in India drains foreign exchange reserves, prompting the Prime Minister's exhortation to halt purchases. Finally, Dr. Ravi mentioned that a falling rupee benefits exporters and the Reserve Bank of India is allowing the currency to discover its true market value.