New Delhi, June 18
The Iraq crisis may spell additional problems for the Narendra Modi government, which is already grappling with challenges posed by errant southwest monsoon and increase in wholesale price inflation.

Prime Minister Narendra Modi today took stock of the situation, including availability of fertilisers in the backdrop of rising inflation, which could be aggravated by the likelihood of a below-normal monsoon. The meeting was attended by Food Minister Ramvilas Paswan, Agriculture Minister Radha Mohan Singh, the Water Resources Minister and the Fertiliser Minister. All ministers made presentations on policies and initiatives being taken by their ministries.

The worsening situation in Iraq is expected to affect crude oil prices, leading to cascading impact on food and fuel prices in India. Depending on imports to fulfil its oil requirements, India is vulnerable to any spike in global oil prices. Notably, the middle-eastern country is India’s second largest supplier after Saudi Arabia.

A day after the new government imposed export restrictions on farm commodities such as onion and ordered a crackdown on hoarding to control rising food prices, its top functionaries remained busy in drawing a multi-pronged plan to deal with multiple challenges, all pointing towards further price rise in the country.

Officials say controlling inflation was the top priority of the PM, who has already warned that a “bitter medicine” was needed to revive the ailing economy. However, all issues “coinciding” at a time when his government was trying to “undo the last government’s anti-economic policies”, any further increase in inflation is completely unanticipated. “Both the problems (prospects of weak monsoon and turmoil in Iraq) are out of the government’s hands,” they say.

The government, which has already taken steps to ensure that the commodity prices do not rise further, is now also planning a real-time data monitoring system to keep track of food production, existing stocks and their prices in the market. The Centre will coordinate with state agencies and governments to ensure a balance between supplies and demand.