भारत समेत वैश्विक मुद्राओं के लिए खतरा है ईरान-अमेरिका संघर्ष, घट सकती है विकास दर, बोलीं गीता गोपीनाथ – geeta gopinath energy self reliance fuel subsidy india economic stability Iran US conflict ntc ntyv
Former IMF Chief Economist Geeta Gopinath shared her opinion on India’s economic situation in an interview with India Today TV on Wednesday. He clarified that India should accelerate its pace towards self-reliance in the energy sector, because the support of controlled fuel prices is about to end.
According to Gopinath, at present the Indian economy looks stable, but if iran If the ongoing conflict between India and America continues for a long time, this stability may soon turn into tension.
Geeta Gopinath In a special conversation with Consulting Editor Rajdeep Sardesai on India Today TV, India’s economy is maintaining a careful balance amid the Middle East crisis. The country has withstood the global oil shock to a great extent so far, but the policy of protecting consumers from rising crude oil prices cannot continue for long.
He clearly said, ‘In terms of fuel, I do not think that the Indian government can continue subsidizing fuel prices for very long. This is not sustainable. This is not possible considering the impact on fiscal deficit.
He further added, ‘At some point of time, the government will have to add a part of the rising prices to the fuel prices being paid to the consumers.’
Energy self-sufficiency is necessary for India
Geeta Gopinath emphasized that global shocks have exposed the risks of India’s heavy import dependence. Therefore, energy self-reliance should now be a priority for India.
He said that energy independence is very important for India. The more you can reduce your dependence on imported energy, the better it will be for India.
The more India reduces its dependence on imported energy, the better it will be for India and the better prepared it will be to deal with future economic shocks. Currently, India’s stability rests on temporary measures and subsidies which could collapse if the crisis escalates.
Mixed effect on growth rate
Commenting on India’s current growth rate, Gopinath said that at present two opposite forces are canceling out each other’s influence. On one hand, the Iran conflict was a negative shock for India, while on the other hand, the reduction of tariff from 50 percent to 10 percent after the decision of the US Supreme Court was a positive event. Due to the combined effect of these two, the Indian economy is expected to grow by about 6.5 percent this financial year, but this balance is very delicate and largely depends on how the conflict progresses.
biggest oil crisis
Gopinath has termed the ongoing crisis as an unprecedented energy crisis. He said that this is a bigger oil crisis for the world than the one in the 1970s. According to him, even if there are no further restrictions on the supply of oil and gas in the market, this is still the biggest shock so far.
He also added that uncertainty increases during the Trump administration, making it difficult to accurately predict global outcomes.
Giving the example of American trade policy, he said, ‘Remember the Liberation Day tariff on April 2. America was going to impose 25 percent tariff on the world, which has now reduced to 10 percent after the decision of the Supreme Court. Tariffs on India have been reduced from 50 percent to 10 percent.
Growth rate may decrease
Gopinath outlined different economic outcomes depending on the duration of the conflict. He said that if everything is resolved in the next one week, the global growth rate will decrease by only 0.3 percent. But if this crisis continues for a long time and oil prices reach $ 100 per barrel, then the global growth rate may come down to 2.5 percent, which under normal circumstances should have been 3.4 percent. This cut will be huge for economies around the world. He acknowledged that uncertainty itself could increase the damage.
India faces many challenges
Gopinath also stressed that not only high prices but also supply chain disruption is a big threat for India. Because India is heavily dependent on the Middle East for its oil, fertilizer and LPG needs. If the supply chain breaks due to conflict, the production process in India will become complicated. This disruption in supply could prove to be more damaging than the increase in prices, because without it industrial and agricultural activities could come to a standstill.
threat of all-round pressure
If the crisis deepens, Gopinath warned of all-round pressure. He said that stopping the supply of fertilizer will affect food security. If this war drags on till May and June, not only food, fuel and fertilizers but also financial conditions will become difficult. This will increase pressure on many global currencies including the Indian rupee. In such a situation, economies like India which are dependent on the Middle East will see a very serious impact on their growth rate.
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