Comments
India's decision to remove price controls on diesel and to raise natural gas prices signals fiscal discipline and is a "credit positive" step, although the overall impact could be limited, Moody's Investors Service said on Tuesday.
"The decision to fully deregulate diesel prices signals fiscal discipline on the part of the sovereign, which we view as credit positive," Moody's said in a note.
Still, Moody's also noted the fiscal savings for the government's diesel measures "are likely to be limited" given total subsidies account for less than 1 per cent of the country's 2013/14 gross domestic product.
Moody's also noted that any future rise in diesel prices could contribute to food inflation by leading companies to charge more for freight transportation services or for the cost of fuel-intensive machines.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.