LONDON, June 25, 2015 /PRNewswire/ -- The steep fall in crude prices has caught the global economy by surprise, not to miss the existing & emerging potential oil exporting nations. On one hand the downward trend is highly detrimental to the nations with major revenue chunk linked to oil exports and those who have invested heavily on the alternate energy sources such as renewable, shale, etc., on the other hand the major net oil importers such as the Asian nations led by India are looking overjoyed on account of anticipated national fiscal savings on buying of cheaper crude oil and drop in fuel prices at consumer end.
On the surface, one may claim that falling crude oil prices are oil importing nation's moment of delight and oil exporting nation's worst nightmare. But is it really all good and great for a crude oil import dependent nation such as India? There is a need to go beyond pre-conceived notions and understand that the reverse of the common phrase, "Every cloud has a silver lining" is also true, especially for a country like India. For a nation like India, there is a need to identify the cloud under the silver lining.
While it may be assumed that India will be able to reduce fiscal deficit, reduce inflation, lower interest rates and recover from oil subsidy on account of lower oil import bill. But the steep decline in crude oil price is expected to leave a bitter taste on the government's tax revenues, translate into lower growth of both exports & imports and impact the GDP growth of the country. It is worth to note that the government has increased the excise duty on petrol and diesel twice in a move to aid the tax revenues. For E&P companies such as ONGC, the price drop is expected to impact negatively due to lower realization, although reduced subsidy burden may have some healing effect.
InfraInsights through its report, "Impact of Oil Price Crash on Different Industries and Overall Indian Economy" is aimed to demystify the impact of the current down-fall in global crude oil prices on the business across the different sectors in the public and private space. The report will also form the basis of an elaborate discussion on how the price trend will be crucial for the incumbent government in bringing out vital economic and policy reforms in India.
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