According to CEA, the impact of crude oil prices on the Indian economy will depend on how long this high price will remain.
Indian economy ready for recovery
Chief Economic Adviser (CEA) V Anantha Nageswaran said on Thursday that the Indian Economy ,economy) is now ready for recovery, but crude oil (Crude oil price) the high price is a matter of concern. In a web seminar organized by the Bharat Chamber of Commerce, he said that the banking sector in the country (banking sector) is stable, capital is available and indebtedness is in position. Currently, the price of crude oil has reached $100 per barrel. Due to which the pressure on the import bill has increased. On expensive crude, Nageswaran said that the impact of the rise in prices on the economy will depend on how long the crude oil prices remain at high levels.
Effect of high inflation around the world
The Chief Economic Advisor said, “We are not alone in facing uncertain growth and high inflation due to the pandemic. Developed countries are also facing the same problem.â€ The General Budget 2022-23 has been made keeping in mind that the price of crude oil will be around $ 75 per barrel, but due to the tension between Russia-Ukraine, crude oil prices will increase. The price has reached $100 per barrel. On high crude oil prices, Nageswaran said, “Its impact on the Indian economy will depend on how long this high price will last”. This is due to the rise in prices. Inflation rate in India at present is around 5.2 percent. He said that in the next financial year, it should remain in the range of four to six per cent fixed by the Reserve Bank. The CEA said the market has started improving and activity in some industries has exceeded pre-pandemic levels, but the services sector is yet to recover. Regarding private investment, he said that it will pick up as consumption levels rise. On the low allocation for MNREGA in the budget, he said that it is a demand based programme. He added, “This was done hoping that the economy would recover and the demand for MGNREGA funds would go down. But, if the program demands, funds will be made available for the same.
Crude rises after Russia’s action
Crude oil prices rose by about $6 a barrel on Thursday after Russian President Vladimir Putin launched military action in Ukraine. Brent crude has crossed $100 a barrel on fears of a supply disruption from Russia. The price of US benchmark crude briefly crossed $ 98 per barrel. Meanwhile, the ruble fell 7.5% to the level of 87 against the US dollar. Brent crude London, considered the basis of international oil prices, rose $5.41 to $99.46 a barrel. It closed 20 cents lower at $94.05 in the previous session.