onebyone
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Oil Leeway
That collapse helped Modi during the first two years of his five-year term, giving him the leeway to cut subsidies on diesel and cooking gas, a move that may have been politically unpopular if oil weren’t so low. It also allowed him to raise taxes on fuel, helping shrink Asia’s widest budget deficit.
Now, oil’s rising as OPEC and allies including Russia curb output to clear the global oversupply, while the Indian rupee is weakening against the dollar. Both are risks for Sankaran Naren, chief investment officer at ICICI Prudential Asset Management Co., the country’s largest money manager. He estimates that Brent at $65 would add $5 billion to the nation’s current-account deficit, which ballooned to $14.3 billion in April-June from $3.4 billion the previous quarter.
Nomura, meanwhile, estimates a $10-per-barrel increase in oil would worsen the current-account balance by 0.4 percent of GDP, widen the fiscal shortfall by 0.1 percent of GDP, and increase wholesale inflation by about 1.4 percentage points.
Brent crude, which has averaged about $53 a barrel this year, was trading 0.3 percent lower at $63.72 at 12:04 p.m. in Singapore.
https://www.bloombergquint.com/poli...i-s-blessing-to-burden-that-threatens-economy
