India tipped to meet fiscal deficit target
23/09/2014 12:27
According to Reuters, officials from the Indian Finance Ministry are hopeful that the country is on track to meet the fiscal deficit target for the current fiscal thanks to a plunge in global crude oil prices which has reduced the government’s subsidy burden.
Global crude oil prices have tumbled by 12 per cent since May when the NDA government resumed power. A dip in oil prices is good news for the exchequer as it leads to lower government outlays on fuel subsidies to oil marketing companies (OMCs) which sell fuel below market rates.
Asia’s third biggest economy is heavily dependent on imported fuel as it imports 80 per cent of its oil needs.
Crude oil prices have fallen below the USD 100 per barrel mark, compared to a budgeted estimate of USD 105-USD 110 per barrel. Finance Ministry officials are hopeful that if oil prices remain below USD 100 per barrel, the costs of oil and fertiliser subsidies may be substantially lower than expected, helping the government to stick to a tough fiscal deficit target of 4.1 per cent of GDP for FY 2014-15.
Leading international rating agency Moody’s Investor Service has cut the estimates for oil prices as a slowing global economy and a stronger dollar dampen demand outlook. It expects Brent Crude to average USD 90 per barrel through 2015, down by USD 5 per barrel from a prior estimate.
23/09/2014 12:27
According to Reuters, officials from the Indian Finance Ministry are hopeful that the country is on track to meet the fiscal deficit target for the current fiscal thanks to a plunge in global crude oil prices which has reduced the government’s subsidy burden.
Global crude oil prices have tumbled by 12 per cent since May when the NDA government resumed power. A dip in oil prices is good news for the exchequer as it leads to lower government outlays on fuel subsidies to oil marketing companies (OMCs) which sell fuel below market rates.
Asia’s third biggest economy is heavily dependent on imported fuel as it imports 80 per cent of its oil needs.
Crude oil prices have fallen below the USD 100 per barrel mark, compared to a budgeted estimate of USD 105-USD 110 per barrel. Finance Ministry officials are hopeful that if oil prices remain below USD 100 per barrel, the costs of oil and fertiliser subsidies may be substantially lower than expected, helping the government to stick to a tough fiscal deficit target of 4.1 per cent of GDP for FY 2014-15.
Leading international rating agency Moody’s Investor Service has cut the estimates for oil prices as a slowing global economy and a stronger dollar dampen demand outlook. It expects Brent Crude to average USD 90 per barrel through 2015, down by USD 5 per barrel from a prior estimate.