Fiscal deficit glide path under threat?

After studying law I vectored towards journalism by accident and it's the only job I've done since. It's a job that has taken me on a private jet to Jaisalmer - where I wrote India's first feature on fractional ownership of business jets - to the badlands of west UP where India's sugar economy is inextricably now tied to politics. I'm a big fan of new business models and crafty entrepreneurs. Fortunately for me, there are plenty of those in Asia at the moment.

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The steep fall in oil prices post 2014 was a key reason for the slide in India’s fiscal deficit as the government chose to raise taxes and keep prices at the pump elevated. Now, with oil prices hovering around $75 a barrel, up from $50 a barrel a year ago, it remains to be seen if, in an election year, the government is able to get away with keeping prices at the pump at high levels. A cut in taxes without a cut in government spending could see a return to higher fiscal deficit numbers the likes of which India saw in the early part of this decade.




 

 

 


(This story appears in the 11 May, 2018 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

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