Home ECONOMY Falling crude oil prices to help govt end diesel subsidies

Falling crude oil prices to help govt end diesel subsidies

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New Delhi, Aug 21 :

With international crude oil prices going below $100 dollars a barrel this week, a top official said Thursday falling oil prices would help the government end diesel subsidies and meet the fiscal deficit target.

Arvind Mayaram, Union Finance Secretary
Arvind Mayaram, Union Finance Secretary

“We have been lucky on oil. We will be able to exit the diesel subsidy,” Finance Secretary Arvind Mayaram told an Associated Chambers of Commerce and Industry (Assocham) meeting here.

“The subsidy bill on account of petroleum has been pegged lower at Rs.63,427 crore for the current financial year, much lower than Rs.83,998 crore in the previous fiscal,” he added.

With these improving numbers, the government should be able to achieve the fiscal deficit target of 4.1 percent of GDP, the Finance Secretary said.

“With the roll out of the Direct Benefit Transfer (DBT), the subsidy burden on the government is going to come down significantly,” Mayaram said.

Despite two succesive years of below 5 percent growth, India’s economy is on course to grow by around 5.8 percent in this fiscal, said the finance ministry’s topmost official.

“I am confident we will achieve 5.8 percent in the current financial year as the green shoots of recovery in the economy are surely visible. Besides, the Budget has strong growth impulses,” Mayaram said.

With industrial production data suggesting that corporate order books are building up, Mayaram hoped that the Reserve Bank of India (RBI) would not hold interest rates high for longer than necessary.

“As we see inflation coming down, hope that threshold (of RBI) we will be able to achieve soon enough,” he said.

(IANS)