The government will also continue to take steps to iron out the mismatches in the procurement of pulses and oilseeds to contain inflation and ensure that infrastructure projects are fully funded even if proceeds from cesses that back these projects fall short, the official said on condition of anonymity.

The official also said that the central government would stick to the FY23 gross market borrowing of ₹14.3 trillion for now.

The Narendra Modi administration, which was banking on a healthy economic recovery this year, is now scrambling to contain the economic fallout of the Russia-Ukraine war and the steps taken by China to contain covid, which have sent energy and commodity prices soaring and curtailed supply of raw materials and intermediates for businesses.

Surging retail inflation, which soared to an eight-year high of 7.79% in April, has forced the central government to cut taxes on fuels, imported edible oils and raw materials for steel and petrochemical production, ban the export of wheat, impose a limit on sugar exports and levy export duty on iron and steel intermediates. The government also raised the fertilizer subsidy for this fiscal to offset the rising costs of soil nutrients.

The spike in inflation has also put a plan to revise GST rates on the back-burner. "Even if we accept recommendations of a ministerial panel (for rate revision) to the GST Council, is the federal body ready to take a decision? The current price situation leaves hardly any scope for rationalization of GST rates," the official said.

Mint reported on Tuesday that the plan of central and state governments to rationalize GST rates to boost revenue collection could get delayed due to a shift in macroeconomic conditions such as a downward revision of economic growth rate and a rise in consumer price inflation.

The official explained that a cabinet secretary-level committee is examining ways to improve cement supplies.

Companies have informed the finance ministry that there is surplus capacity in factories in south India, but the challenge was efficient shipping to different markets across the country.

The idea is to ship cement from south India by sea to various ports such as Haldia in West Bengal and then by inland waterways, road and rail transport to further distribute the building material.

India is also exploring a rupee-rouble payment with Russia. The official said that there is a mechanism set up earlier, and efforts are to see if it will work in the current context.

The Centre is also prepared to fully meet the financing requirements of projects such as those backed by road and infrastructure cess collection even if the revenue proceeds from this levy do not meet the target, the official said.

For the current fiscal, the estimated collection from this cess is ₹1.38 trillion but the amount to be utilized for projects is ₹2.95 trillion, the official explained.

In FY22, too, the actual amount spent on projects was more than the cess collection, the official said.

An email sent to the finance ministry seeking comments for the story remained unanswered at the time of publishing.