Chief eco advisor tells why crude fall benefit's not shared

Stating that India stands out as beacon of dynamism and hope in an environment where there are growing global concerns, Chief Economic Advisor Arvind Subramanian said that there are positive impulses to growth going forward.

Discussing slow growth in tax revenue and government’s stance on passing on the fall in global crude prices, Subramanian said that from an analytical point of view, any decrease in the commodity price, one wants to share the gains between consumers and government because in some ways the latter is like a “shock absorber”. However, the government is not entirely sure whether this fall in crude is permanent or temporary.

In an exclusive chat with CNBC-TV18’s Menaka Doshi, on the sidelines of World Economic Forum in Davos, Subramanian said the government has not been passing on the full benefits of falling crude to avoid volatility. “We need to maintain a balance. Besides we also need to look at petroleum taxation independently. We have brought it down to very low levels but then again we also have this fiscal deficit issue that needs to be addressed,” he said.

“Thus how you should share the kind of gains from the decrease in international prices is a bit more complicated. The consumers have surely benefitted but not to a full extent,” he added.