Don't take my subsidy away
Struggling to bring down its fiscal deficit, India wants to stop allowing commercial ventures like movie theatres, swish office complexes, and hotels from using highly-subsidised diesel fuel to run-back up generators when the power goes out. It is also trying to wean factories, mobile phone towers, and state-run bus companies from highly subsidised fuel.
But New Delhi has discovered that a partial-phase out of subsidies – particularly targeting affluent and resourceful entrepreneurs – is more difficult than it looks. Read more
In India, anyone who stands in public rearranging their purse would face a barrage of pleas from all sides. With the upcoming Budget announcement, the Indian government is experiencing much the same phenomenon.
The Society of Indian Automobile Manufacturers (SIAM) announced a fall in car sales for January – the third consecutive month of decline – and followed the news with a plea for a cut in excise duties in the coming Budget. Read more
When times are tough, you don’t need good news to cheer investors – even an absence of bad news comes as a relief.
After weeks of concern around a possible sovereign downgrade for India, Moody’s has reaffirmed its government bond rating of BBA3, labelling it “stable”. Read more
It looks like India’s decision in mid-September to cut subsidies for diesel is starting to curb consumption of the fuel in the price-sensitive nation.
Growth in diesel consumption fell to 5 per cent in September, according to analysis by the Business Standard. That’s down from 10.4 per cent in August, 13 per cent in July and 13.7 per cent in June, according to data provided by the government’s Petroleum Planning & Analysis Cell. Read more
Major automakers are considering raising diesel engine production capacity in India to capitalise on exploding demand for the highly-subsidised fuel.
Toyota Motor and Maruti Suzuki, India’s biggest carmaker, have both said in the last week that they are mulling expansion plans. Ford and Volkswagen are also looking to boost diesel engine production capacity. Read more