Low oil prices have created a favourable environment for the Indian economy as it helped to absorb the loss faced by oil companies and kept inflation under control, Finance Minister Arun Jaitley said today.
Jaitley said that low oil prices also enabled the government to rationalise subsidies. "It has enabled us to absorb the loss that our own oil companies were facing because of future purchases. It has also kept inflation under control, which, in turn, has helped the Reserve Bank to ease up the rates.
"It has also enabled us to increase the cess around fuel which has been diverted for infrastructure creation," he said told reporters during a press briefing. Oil prices, at the levels they have been during the last few months, created a favourable environment for the Indian economy, he said.
He also said that low oil prices also means effectively transfer of wealth from the producing nations to the consuming nations. The Finance Minister arrived here yesterday on a two-day visit to United Arab Emirates (UAE) to impress on investors various attractive investment opportunities that India provides.
As far as investment opportunities are concerned, the Minister said, "It is one thing to say that the investment must come but it doesn't merely come in by enlarging the door for entry."
"Investment comes in when investors feel confident about the state of the economy and when they feel confident that their investment is safe and will bring adequate returns," he said.
On another question regarding investment he said he has a meeting lined up with the Abu Dhabi Investment Authority (ADIA) at the highest levels.
"We are certainly going to be looking at the investment from here coming into various sectors. The obvious area of attraction for us is going to be the India Infrastructure Investment Fund, which has a sovereign participation," he said.
Jaitley said that the environment for investment is more conducive now because the decision making is quicker, infrastructural investments are picking up and Indian economy is growing faster than most other economies in the world.
"Prudent investors will hence make a conscious choice as the circumstances are very favourable to us," he said. Earlier addressing a gathering of Indian businessmen here, Jaitley said that economic crises earlier would leave an impact once in 10-15 years but now they are far more frequent.
"Under these circumstances India has to find it's own level," he said, adding "Despite adverse global circumstances, India is still managing to keep ahead. We have our agenda full in terms of reforms and investment into key areas."