๐ข๐ถ๐น ๐ฆ๐ต๐ผ๐ฐ๐ธ ๐๐ฒ๐ฎ๐ฟ๐ ๐ข๐๐ฒ๐ฟ๐ฑ๐ผ๐ป๐ฒ, ๐๐ป๐ฑ๐ถ๐ฎ ๐๐ฟ๐ผ๐๐๐ต ๐๐ฏ๐ผ๐๐ฒ ๐ด%: ๐ก๐ฒ๐ฒ๐น๐ธ๐ฎ๐ป๐๐ต ๐ ๐ถ๐๐ต๐ฟ๐ฎ
Neelkanth Mishra says concerns about oil shocks hurting India are overstated. Mishra serves as India's new Executive Director at the World Bank and is a member of the Prime Minister's Economic Advisory Council.
India's economy grew 7.1% in FY25 despite fiscal and monetary tightening. Mishra said growth would have been higher without these limits. Credit growth is improving and fiscal policy is now less restrictive. The economy was expanding at more than 8% until February-March 2025.
Recent data points show strength:
- Car sales rose 29% year-on-year in May
- Mall footfalls and sales remain strong
- Cement demand is growing at a high single-digit rate
Mishra said India's risk from oil shocks is lower than many expect. Domestic oil marketing companies earn from refining operations. Higher crude prices raise costs, but stronger refining margins offset part of the impact.
Crude oil trades around $94-95 per barrel. Diesel refining margins are easing. Mishra said India does not need to raise fuel prices further. Fears of a large hidden fuel subsidy are misplaced. The Rs 20-30 per litre subsidy is not needed. The Rs 8 per litre cushion is sufficient after China and the US released oil inventory.
Oil at $100 per barrel would cut growth by roughly 2%. Mishra said the economy would keep growing. Fertiliser price caps are unlikely to be needed by March 2027 if oil moves toward $80 per barrel. Futures markets point to this lower price level.
Energy prices still pose a risk. India's refining surplus, strong domestic demand, and less restrictive fiscal and monetary policy should keep growth in the 7.5-8% range even if crude prices stay high. Mishra said the bigger challenge is managing the message until data proves the resilience.
Source: The Times of India