- India's Chief Economic Adviser warns crude futures surge is not temporary shock
- Crude futures have risen over 40% due to the West Asia crisis
- The crisis poses a balance of payments stress test for India
India's Chief Economic Adviser V. Anantha Nageswaran has warned that the surge in crude futures is not a temporary shock and will test India's fiscal health, potentially prompting a rethink in the nation's fiscal consolidation path.
Speaking at the second session of the CII Annual Business Summit, Nageswaran said crude futures have risen over 40%, adding that the sudden surge, emanating from the West Asia crisi, is structurally significant rather than transitory.
He described the West Asia crisis as a "balance of payments stress test" for India, signalling that the external account risks from elevated energy prices are severe enough to warrant policy recalibration.
This comes at a time when there are growing alarms over India's economic and business establishment. Uday Kotak, for one, has already warned that the ongoing problems has much more complexity attached to it, even warning that the 'shock is coming'.
"My view is we should prepare for paranoia before the event. We must prepare for the worst." he said.
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