According to Confederation of Indian Industry (CII), with the spread of the coronavirus denting global oil prices, India, that imports 80 % of its crude oil needs, is likely to save a whopping $45 billion on oil imports next financial year, Indian ETEnergyWorld reported.
A $1 decline in the price of crude oil reduces the country's import bill by $1.5 billion. "In 2020, international crude oil prices are expected to average $35 per barrel from $65 per barrel in 2019, a fall of about $30 per barrel. India is expected to save about $45 billion on oil imports for full year 2020-21," the industry chamber said in a report.
The rapidly spreading Covid-19 has derailed the global economy, increasing the chances of a global recession setting in, it said, adding India has already been facing growth deceleration, with GDP growth having fallen to 4.7 % in 3rd quarter of 2019-20.
The impact of coronavirus is likely to pull it down further in the 4th quarter. GDP growth could slide to below 5 % in 2020-21 if policy action is not taken urgently.
In order to improve market sentiments, the government may consider removing Long Term Capital Gains tax of 10 % and fixing the total Dividend Distribution Tax at 25 %.