March 13, 2012 by akhilendra
Monster in India
Monster in India
Monster in India does sound scary but it’s a fact. And this monster is nothing else than this economic slowdown which has become even more dangerous after state assembly elections. This monster in India has been on rampage for more than a year now and is threatening to impact this year also. Crude prices are again gradually rising and weak rupee is adding further pressure on the already struggling economy.
In December 2011, when Indian Rupee was at a record low of around Rs 53 against US dollar, cost of importing oil for India went significantly high. If it continues to happen and Rupee which is currently trading at a range of 49 to 50, things are going to be worse and this monster in India would remain stronger for some more time.
As per a recent report, the daily losses for the three major oil marketing companies are around Rs 465 crores. This only accounts for the losses on the diesel, kerosene and LPGs. Other petroleum product like Petrol also adds to their profit and loss sheet & total value of losses may surpass all previous records. At the moment, crude oil traders and experts are expecting that crude prices will cross $ 150, it is a very bad equation for Indian economy.
This monster in India will have even more devastating effect if it is accompanied by the week rupee and credit downgrade by S&P. S&P has already warned India about its weak finance. Fiscal deficit in India is in a very dangerous zone and it is going to be extremely difficult for the government and state agencies to counter this situation.
A lot depend upon the budget but again expectations are low because the results which ruling party had faced in the recently held state assembly elections. Unless until some major and probably harsh steps are taken to push back the economy on track, this monster in India is going to spoil the party which India had in last few years. The road ahead is unclear and there are lots of obstructions. It is yet to be seen that “how things are going to unfold in union budget 2012”?
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