India cut to fuel duty to lead to missed deficit target

India is likely to overshoot its fiscal deficit target for 2018/19 by a small margin following its decision to cut fuel excise duties, Moody’s Investors Service said on Tuesday, describing the move as “credit negative”.

The government announced cuts in excise duty on gasoline and diesel last week, to soften the impact of sharp rise in global crude oil prices on consumers.

The move came a few months before elections in three key states this year followed by national elections due by May.


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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.