Finance Minister (FM) Arun Jaitley and Reserve Bank of India (RBI) Governor Urjit Patel on Saturday said the movement of oil prices was uncertain. But, the FM was confident that there would be no fiscal slippage next financial year, thanks to buoyancy in revenue.
Addressing journalists after the post-Budget interaction between the FM and the RBI board, Patel said decisions of the Monetary Policy Committee (MPC) were forward-looking and not based on the day-to-day inflation rate. He added credit growth and the corporate debt-equity ratio were improving, and transmission of RBI policy decisions had improved since demonetisation.
The government had demonetised Rs 1,000 and Rs 500 notes in November 2016.
“We observed that in recent times oil prices had two-way movements. We need to be prepared for these movements because these are difficult to predict,” Patel said. He added some advisors had said a few months ago oil prices would not cross $45 a barrel.
Global oil prices have cooled in the past few days, but concerns remain about potential headwinds. For instance, US crude plunged to a seven-week low of $58.07 a barrel, before paring losses on Friday to touch $59.20.
Jaitley said the fiscal situation would be comfortable next financial year and there were no concerns about slippages from the deficit targets. Read More