New Delhi: Two weeks after Prime Minister Narendra Modi urged Indians to adopt austerity measures, Union finance minister Nirmala Sitharaman addressed the state of the Indian economy and said that a “cynical and pessimistic narrative is being generated”.Sitharaman’s remarks came on a day when fuel prices were hiked for the fourth time in 11 days, and at the end of Monday (May 25)’s trading session, the rupee was quoted at Rs 95.25 against the dollar, per PTI.The finance minister said that while the country was facing challenges “not of our making” the Indian economic situation remains “positive and resilient”. Sitharaman said pointing to rising fuel, fertiliser and gold prices that citizens must appreciate that the challenges are largely externally driven and that India’s economy remains positive and resilient.“We should understand the context and focus on the three ‘F’s – fuel, fertiliser and foreign exchange. And the foreign exchange in this context is for the purchase of gold. We should also appreciate that challenges are more [externally] driven. We must also recognise that India’s domestic economic situation remains positive and resilient even today,” she said while addressing the 37th anniversary of the Small Industries Development Bank of India.“Therefore those naysayers who jump into the scenario, and say ‘look around, it’s all falling down, it’s crumbling’ – there is a section of Indians who very quickly want to decry the achievements of our own people. All the good that is being done by the common people themselves, that is forgotten. And a pessimistic, cynical narrative is generated, which is just not right. It is not right because it is fearmongering. India cannot afford fearmongering. India continues with a robust economy.”Sitharaman in her remarks referred to Modi’s call for austerity and said that the West Asia conflict is not just a geopolitical issue and that the government’s approach is to protect its citizens.“The West Asia crisis is not only a diplomatic or a geopolitical issue. For businesses and common people, it can mean higher fuel costs, delayed cargo, costlier shipping, shortages of inputs, pressure on working capital and uncertainty in export orders. Just imagine all of them coming together because of the West Asia crisis. It is a big challenge not just for India but for many other countries,” she said.“The government’s approach has been and will have to be to protect citizens, support MSMEs [micro, small and medium enterprises], safeguard exporters, keep supply chains moving and maintain economic stability. That is why the honourable PM giving a call to conserve foreign exchange as far as possible is very important in this context.”Sitharaman said that Modi’s call for austerity measures needs to be understood in the context of high and dynamic international crude oil prices, fertiliser prices and high gold prices.“I will delve into this because it has led to a lot of narrative around the country. We need to understand the context in which the PM made the call. It’s because of high and seriously dynamic international crude prices – [there is] one rate [and] within a week another – and it has been like this for 80-90 days. High international fertiliser prices, unimaginable increase and high gold prices that are creating some challenges on the external front. For all these three, payments have to be made in foreign exchange. There is no rupee trading there,” she said.Sitharaman’s remarks came as fuel prices on Monday recorded the fourth hike in 11 days, and after assembly elections in four states and one Union territory ended. This period has seen a hike of over Rs 7 in fuel prices.Addressing reporters later in the day after the TEXPROCIL Export Awards, Sitharaman said that for about 76 days the government ensured there was no additional burden on citizens and that it had provided relief amounting to Rs 1 lakh crore.“From the government’s side, for about 76 days, our objective has been to ensure that no additional burden is placed upon the people. We have provided relief amounting to more than Rs 1 lakh crore annually this year through reductions in excise duty,” she said.“Had we not granted those reductions at that time, even at that time, prices would have risen by Rs 10 per litre right at that time and that is almost 1 lakh crore. But the price increases currently are coming from the oil marketing companies, as they are the ones who are procuring and selling.”The Wire has analysed that this fiscal loss to oil marketing companies is an artificial crisis inflicted upon the public sector, since pump prices were never brought down when crude prices were low. The government raised excise duties, earned higher dividends and collected more tax by suspending market-linked dynamic pricing.Sitharaman again said that the external challenges are not of India’s making but India will emerge under Modi’s guidance.“The West Asia crisis, Strait of Hormuz crisis, Russia-Ukraine war crisis, Iran-Israel-US war crisis, the supply chain disruption crisis, the increasing fuel price, fertiliser price – and they are not minor increases, they are very serious increases, all of which will have to be paid through foreign exchange only,” she said.“So, these are going to be challenges, but I am confident – and I am saying this with responsibility – I am confident that with the guidance of the prime minister, we will be able to handle those challenges which are not of our making. If crude oil prices are growing, we will have to monitor this but make sure people don’t suffer.”