Weak oil prices helped government rationalise subsidies: Arun Jaitley
17 November 2015
The Indian economy benefited from the favourable environment created by low oil prices, as it helped to absorb the loss faced by oil companies and kept inflation under control, finance minister Arun Jaitley said yesterday.
Jaitley also said the low oil prices had also enabled the government to rationalise subsidies.
"It has enabled us to absorb the loss that our own oil companies were facing because of future purchases. It has also kept inflation under control, which, in turn, has helped the Reserve Bank to ease up the rates.
"It has also enabled us to increase the cess around fuel which has been diverted for infrastructure creation," he told reporters during a press briefing.
He added, oil prices at the levels they had been during the last few months, created a favourable environment for the Indian economy.
He added that the low oil prices also meant effective transfer of wealth from the producing nations to the consuming nations.
The finance minster is on a two-day visit to the United Arab Emirates (UAE) to impress investors on various investment opportunities that India provides.
According to Jaitley, the Modi government had the votes to win approval for a goods-and-services tax (GST), first proposed in 2006.
The tax, one of India's biggest economic reforms in decades, could roll out anytime next year after its approval, Jaitley said in an interview with Bloomberg TV India.
The opposition had blocked the measure in the Rajya Sabha, where it has a majority.
''The day it is discussed and put to vote in Rajya Sabha I have not the least doubt that it will be approved,'' Jaitley said in the interview in Dubai last evening. ''We have numbers on our side.''
The tax would be the main agenda when parliament reconvened next week. It was aimed at whittling down over a dozen state levies to create a single market among India's 1.3 billion people for the first time.
While Modi's defeat in the recent Bihar state polls made it difficult for him to get control of the opposition-controlled upper house, Jaitley said it would not affect the passage of the GST.
He added, as a consumer of goods, Bihar stood to benefit from the new destination tax.