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Amarendra Dhiraj Group moderator
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Oil pricing
The oil situation is central to the weakness in our overall economic situation particularly the macro and there is no easy quick fix to it. The government in the last three-four years has seriously bungled the whole oil pricing matter. The prices have been going up for the last three-four years.

What we do is what we should have done, which is gradually increasing the fuel prices petrol, diesel, kerosene and LPG. So, that will reduce the level of under recoveries and deficits that go with it. At the same time, we should give up on this oil bonds business, make it a clean subsidy from the government to the oil marketing companies. By going the oil bond route, what you are doing is essentially giving bits of paper to these oil marketing companies which they find hard to use to purchase inputs or maintain their operations or even buy oil from abroad.

The limits of the Fiscal Responsibility and Budget Management (FRBM) act will be breached but from an economic point of view that has already been breached. So, all that you will be doing is making transparent what is going on in a opaque way.

Please post comment on this issue....

Amarendra

Audacious innovation
http://www.ceo-world.biz
- 18 Jun 2008, 10:26 am
Amarendra Dhiraj wrote: > The oil situation is central to the weakness in our overall economic > situation particularly the macro and there is no easy quick fix to > it. The government in the last three-four years has seriously bungled > the whole oil pricing matter. The prices have been going up for the > last three-four years. > > What we do is what we should have done, which is gradually increasing > the fuel prices petrol, diesel, kerosene and LPG. So, that will > reduce the level of under recoveries and deficits that go with it. At > the same time, we should give up on this oil bonds business, make it > a clean subsidy from the government to the oil marketing companies. > By going the oil bond route, what you are doing is essentially giving > bits of paper to these oil marketing companies which they find hard > to use to purchase inputs or maintain their operations or even buy > oil from abroad. > > The limits of the Fiscal Responsibility and Budget Management (FRBM) > act will be breached but from an economic point of view that has > already been breached. So, all that you will be doing is making > transparent what is going on in a opaque way. > > Please post comment on this issue.... > > Amarendra > > Audacious innovation > www.ceo-world.biz

Non Resident Indian Business Forum

Oil pricing