India’s growth monikers — the world’s fastest-growing major economy and the fastest-growing oil user — might make for good headlines, but when juxtaposed with the less-flattering description of its currency they pose a problem for Prime Minister Narendra Modi.
The rupee, Asia’s worst-performer so far this year, has fueled gasoline and diesel prices to a record high and fanned public displeasure with general elections less than eight months away. It prompted Modi’s ruling Bharatiya Janata Party to say on Saturday the government will soon come up with an action plan to rein in fuel prices.
The government has so far resisted the populist trend of cutting fuel prices to avoid forgoing tax revenue and missing budget goals. Record retail fuel costs are adding to Modi’s challenge of tackling a hurtling pace of economic growth that’s boosting ownership of vehicles and demand for oil at a time when the impending U.S. sanctions on Iran is set to worsen the outlook for crude prices. Read More