Forbes India 15th Anniversary Special

Fiscal deficit glide path under threat?

Samar Srivastava
Published: Apr 24, 2018 03:07:23 PM IST
Updated: Apr 24, 2018 03:43:06 PM IST

Fiscal deficit glide path under threat?Image: Shutterstock

Fiscal deficit glide path under threat?


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. To visit our Archives, click here.)

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