Oil Price fall _ Good for India Macro

Crude oil price has been decreasing but the prices of Diesel and petrol has not decreased in India in the same proportion. Government has rather taken this opportunity to increase its own kitty to reduce fiscal deficit by increasing taxes on petroleum products. This is definitely not good for consumer in the short term but good for the Country in the long run to maintain fiscal discipline in the Country. Government can also think about creating a contingency Fund to support oil price in future. Crude oil has decreased from USD115 to USD 65 per barrel in the last 7 Months benefiting India. Such a free fall in Oil price has also created lot of problem for Oil Economy.  Fall beyond USD60 is definitely concerning for Global Economy as per experts as it would indicate less fuel consumption and low economic activity. Importance of Crude oil has been decreasing since last 10 years due to the emergence of alternate energy sources. The success of shale Gas in USA has changed he situation and importance of OPEC has been decreasing gradually. Reducing Oil prices has helped India to keep its CAD low which in turn will help to  face any volatility in capital inflow . Reducing crude price will help government to achieve its fiscal deficit target of 4.1% for FY15 as oil subsidy to OMC is decreasing. On the inflation front also India is getting big advantage due to falling crude price. Corporate profitability will also increase due to lower cost of production in many sector