Diesel Price Cut to Reduce WPI by 0.20%: Motilal Oswal

Diesel deregulation would result in a sharp fall in diesel inflation to 4 per cent from 13 per cent by December 2014, said Motilal Oswal.

This paves the way for a sharper decline in inflation indicators, ahead of expectations.

RBI may cut rates 2-3 quarters ahead of consensus expectations on the back of these developments, says Motilal Oswal, adding that the government would be able to limit the oil subsidy bill within the budgetary target of Rs 63,400 crore.

The government's fiscal deficit target of 4.1 per cent is now more credible, Motilal Oswal said.

Copyright: Thomson Reuters 2014

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