[zenren]

Guys, another factor we shouldn't forget is that the whole equation would change the minute rupee weakens. Crude might be $40 a barrel but if the exchange rate of rupee nose dives to 70 or 75 against dollar, then all that low priced crude is going to be just a myth. So the first priority of the government should be to ensure economy remains stable or rising.

[gsurya]

I wouldnt worry about a falling rupee, its just temporary, see the points made by an ex-Harvard professor & a key adviser to this Govt:

• Zero income tax mooted
• 120 lakh crores black money from abroad to be brought back & distributed
• Rupee to strengthen to 35 INR against USD by 2016

http://archive.financialexpress.com/...-swamy/1244498

https://www.youtube.com/watch?v=T13UNGZrhFc

I am sure when this happens Govt will remove all taxes from fuel like their Govt in Goa did on petrol & all will be well.

[pgsagar]

Originally Posted by longhorn

What I'm looking for is some sort of correlation between what the govt says and what it does. When their stated policy was to deregulate fuel pricing (which again was a continuation of the previous govt's policy), what I'm seeing is the exact opposite of what is being stated. Best way to deregulate is to have a fixed amount as taxes (VAT+excise+cess) and let the oil companies fix the price based on what they pay for crude.

The last time excise duty was hiked it was acceptable. The 2nd hike is totally unjustified. The govt is acting like those housing finance companies whose base rate always goes up whenever RBI hikes the repo rate, but never comes down when the RBI reduces it.

As long as the Saudis don't cut production (which seems unlikely now) crude is not going to cross 75-80 $ per barrel. In this scenario, I might as well enjoy the lower prices while it lasts, rather than the govt save up for me now and stop the price hike at a later date (which anyways is not going to happen).

A 40% drop in the cost of crude has led to a drop of just 17% in the price of petrol at the pump - this is just not done.

EDIT: The FM was prodding Raghuram Rajan to get the RBI to cut rates. I'm happy he didn't succumb to the pressure. He's one of those few sensible people I see out there, and the govt doesn't have many people made of such stuff. If the FM would have reduced fuel prices instead, it would have done its bit to reduce inflation.

Well said. I wanted to see the fuel prices come down to 2006-07 levels, given the opportunity that presented itself. It would have been "yesterday once more" again. Like a trip back in time machine to a time when fuel costed less. Would it not have been wonderful? I mean let us have some good time while the party lasts. The party eventually may end (although it is unlikely that crude may climb back to where it was in Jan '14). All good things come to an end. But at least we could have sampled that good time. But, alas, GOI is such a party-pooper. It had other plans. Seeing smiles on the faces of its citizen is not one of those.

[sgiitk]

Raghuram Rajan feels that the floor for the Rupee is $1=Rs.63, if so then depreciation may not be that bad in the next couple of years.

[extreme_torque]

Originally Posted by poloman

Well said. service tax is another one implemented to net these kind of individuals who never pay taxes honestly.

So I pay my direct taxes honestly and then I have to pay even more taxes so that people who don't are somehow taxed. Have I missed something?

[gsurya]

Originally Posted by sgiitk

Raghuram Rajan feels that the floor for the Rupee is $1=Rs.63, if so then depreciation may not be that bad in the next couple of years.

I am predicting we will be at 65-68 next year; we need a weaker rupee for exports to boom - a weaker Rupee now is desirable because crude is cheap; make hay while the sun shines.

[sgiitk]

Originally Posted by gsurya

I am predicting we will be at 65-68 next year; we need a weaker rupee for exports to boom - a weaker Rupee now is desirable because crude is cheap; make hay while the sun shines.

I am surprised that the Re is staying below 62 even though he has more or less declared a rate cut in Q1 CY15.

[gsurya]

Originally Posted by sgiitk

I am surprised that the Re is staying below 62 even though he has more or less declared a rate cut in Q1 CY15.

Check the USD-INR charts for last year, trend is clear. We have nothing to gain & more to lose now from a strong rupee, especially with a crude price downfall windfall.

http://www.xe.com/currencycharts/?fr...to=INR&view=1Y

[sgiitk]

@gsurya; I may tend to agree, the difference in interest rates is about 5% so in a simple minded approach this is the annual depreciation which may be expected.

[sdp1975]

Brent hits a 5yr low. Will the government reduce prices or again pocket the difference ?

http://economictimes.indiatimes.com/...w/45426423.cms

[audioholic]

Originally Posted by sdp1975

Brent hits a 5yr low. Will the government reduce prices or again pocket the difference ?

http://economictimes.indiatimes.com/...w/45426423.cms

I guess this time it the difference will be passed onto people since they would like to face the ire of the people. Last time they did it, it didn't invite much of criticism, but if they do it repeatedly, it will be an issue. Moreover how much of excise do they want to eat anyway

[ILTDrive]

Originally Posted by audioholic

I guess this time it the difference will be passed onto people since they would like to face the ire of the people. Last time they did it, it didn't invite much of criticism, but if they do it repeatedly, it will be an issue. Moreover how much of excise do they want to eat anyway

+1 to the above

The trend has been that they pass on some benefit to the customers and then raise Excise on the remaining part of the overall gain, that way they are hoping to keep both sides of the coin happy.

[pgsagar]

Originally Posted by audioholic

Moreover how much of excise do they want to eat anyway

Try them. You will be surprised. GOI can eat entire money of universe and galaxy and yet say, " we are broke." "khajana khali hai." Their coffers are a bottomless pit which not even all Gods of universe can fill.

[audioholic]

Originally Posted by pgsagar

Try them. You will be surprised. GOI can eat entire money of universe and galaxy and yet say, " we are broke." "khajana khali hai." Their coffers are a bottomless pit which not even all Gods of universe can fill.

Oh come on. That's a very general view. Budgets aren't bed time stories. The excise duty increase will show up in the revenue of the government and not into some persons savings account. As I told, when there are five cuts in the price, personally I can give up one, maybe not more. And at the same time o believe the government is sensible or rather clever enough not to disappoint people With elections coming up, they have greater leverage to cut excise and fool people now. Think of that. It's a win-win for the government. Make more revenue and still have the room to cut down some fuel prices too if required.

[pgsagar]

Originally Posted by audioholic

Oh come on. That's a very general view. Budgets aren't bed time stories. The excise duty increase will show up in the revenue of the government and not into some persons savings account. As I told, when there are five cuts in the price, personally I can give up one, maybe not more. And at the same time o believe the government is sensible or rather clever enough not to disappoint people With elections coming up, they have greater leverage to cut excise and fool people now. Think of that. It's a win-win for the government. Make more revenue and still have the room to cut down some fuel prices too if required.

I never said budget is a walk in the park. But, they don't have to be this greedy. For lack of better word I use this. Tax on tax. Then those sky-high tax tariff rates. It all may sound like the usual rants against Govt. But... Anyway, please don't even get me strated on this one. We all know all the things that are wrong with this country. So no point digressing here. Just hoping we get some relief this time around, since last two price cuts were usurped by GOI.