Why falling crude oil is hope rising

It may be gloom, doom and bust on Dalal Street this Diwali as the economy braces itself for a “cloudy” growth outlook and the Finance Ministry admits that fiscal deficit targets for this year won’t be met. But if there is one silver lining and for India, Asia’s third largest economy, a bold one at that it is the dramatic fall in global crude oil prices from nearly $150 a barrel this June to $56 now.

This slide in crude oil presents Prime Minister Manmohan Singh and his lieutenants a significant fiscal headroom to pump-prime the economy and risk some adventure in big-ticket infrastructure spending, both social and physical. Besides, it also helps the rupee hold on to its own because of lesser demand for dollars by oil refiners. Last, but not the least, it douses inflationary expectations, giving the government and the Reserve Bank of India more leeway in lowering lending rates and infusing more liquidity into the system to spur growth.

India imports almost 70 per cent of its fuel needs, and oil is the biggest item. In 2007-08, it imported 121.672 million tones of crude oil and the bill was a staggering $68 billion.

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Gold deal gone wrong, Indian peace keepers hit back: United Nations

To recover $480 they had paid as part of a gold deal, Indian peace keepers in Congo illegally detained, physically assaulted and “sexually propositioned” a local gold trader who had sold them counterfeit gold dust, a UN investigation on charges of misconduct in the country’s North Kivu province has revealed.

The report prepared by the UN Office of Internal Oversight Services (OIOS), however, says it failed to find evidence against the Indian contingent on allegations ranging from gun smuggling to selling rations and fuel to rebel militia.

On one of the charges, the report says there is evidence to prove that three members of an Indian unit based at Nyabiondo purchased “counterfeit gold and unlawfully detained a local resident”. It recommends India take appropriate action against the peace keepers.

The three Army personnel have been identified in the UN report as “JCO Deepak Singh Nayal, Sergeant Suresh Pandurang Bodhak and Lt Col Talum Duby”. The Army has also initiated a court of inquiry against the personnel who have since returned home.

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