Review custom, excise duty structure on oil

New Delhi, Jan 20 (UNI) Faced with the rising oil prices, Indian industry has strongly called for a review of customs and excise duty structure on oil and oil products, with a near unanimous view that the government should look at a floating tariff regime in this segment, a survey revealed.

The survey 'Emerging oil price scenario and the Indian industry' conducted by industry body FICCI, suggested that in the forthcoming budget the government should announce a 'new fund' for providing subsidized loans to industry for switching over to energy efficient technologies.

Such a move would also give impetus to the efforts of companies to invest in energy saving technology and equipment.

The survey brings forth the views of Indian industry on what could be the impact of the current surge in international crude prices on different macro-economic parameters including industry performance and how industry members are coping with the evolving situation.

While 52 per cent of the companies surveyed felt that the recent surge in the oil prices is likely to have a 'serious' impact on the economy, another 43 per cent said that the impact would be 'moderate'.

With regard to the impact on certain key macro-economic parameters, an overwhelming 90 per cent of the respondents felt that rising oil prices would have a 'medium to high' impact on the inflation.

Industry members also feel that rising oil prices would considerably deteriorate the country's trade balance. Nearly 88 per cent of the participants were of the opinion that the impact on trade balance would be 'medium to high'.

There is also a clear apprehension among members of corporate India that in its bid to keep inflation under check the central bank (RBI) may continue with its tight monetary stance and that interest rates may inch further up.

Nearly 74 per cent of the companies that participated in the survey feel that rising oil prices would have a 'medium to high' impact on interest rates in the country.

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