Topic Of The Day:-“Slippery Slope: On India’s Energy Needs”
India Must Diversify Its Energy Basket More Proactively.
India’s economic fortunes continue to be tied to the sharply fluctuating price of oil. At a gathering of prominent oil ministers in New Delhi on Monday, Prime Minister Narendra Modi urged oil-producing countries to reduce the cost of energy in order to aid the global economy in its path towards recovery. Mr. Modi also called for a review of payment terms, demanding the partial use of the rupee instead of the U.S. dollar to pay for oil, in order to ease the burden on oil-importing countries in the wake of the strengthening of the dollar. With well over 80% of its oil demand being met through imports, India clearly has a lot at stake as oil prices have risen by as much as 70% in rupee terms in the last one year. Notably, speaking at the same event, Saudi Arabian Energy Minister Khalid A. Al-Falih refused to openly commit to lower oil prices, opting instead to say that the price of oil could have been much higher but for the efforts taken by his country to boost supply. This is not surprising given the absence of significant rival suppliers in the global oil market willing to help out India.India’s policymakers now face the difficult task of safely steering the economy in the midst of multiple external headwinds. For one, the current account deficit widened to 2.4% of gross domestic product in the first quarter of 2018-19 and is expected to reach 3% for the full year. The rupee, which is down about 16% since the beginning of the year, doesn’t seem to be showing any signs of recovery either. Further, the growth in the sales of petrol and diesel has already been affected adversely as their prices have shot through the roof. All this will likely weigh negatively on the prospects of the Indian economy, the world’s fastest-growing, in the coming quarters. In this scenario, the decision to marginally cut taxes imposed on domestic fuels is unlikely to be of any significant help to consumers. What is required is a steep cut in Central and State taxes for the benefit to carry through to the consumers, which, of course, is unlikely given the government’s fiscal needs. Another long-term solution to the oil problem will be to increasingly tap into domestic sources of energy supply while simultaneously encouraging consumers to switch to green alternatives. This will require a stronger policy framework and implementation. In the short term, the government could look to diversifying its international supplier base to manage shocks better. But such a choice carries geopolitical risks, such as in the case of Iran. Since it will take a length of time to wean the economy off oil imports, policymakers should also be willing to think beyond just the next election if India’s over-reliance on oil is to come to an end for good.
MEANINGS AND WORDS
1) Fortunes
Meaning: a large amount of money or assets.
Synonyms: Wealth, riches, substance, property
Antonyms: Debt, Poverty, Hardship
Example: “He inherited a substantial fortune”
2) Fluctuating
Meaning: Rise and fall irregularly in number or amount.
Synonyms: vary, differ, shift, change
Antonyms: Remain, Stay, Continue
Example: “Trade with other countries tends to fluctuate from year to year”
3) Prominent
Meaning: Important; famous.
Synonyms: Important, well known, leading
Antonyms: Inconspicuous
Example: “She was a prominent member of the city council”
4) Aid
Meaning: Financial or material help given to a country or area in need.
Synonyms: Assistance, support
Antonyms: Harm, Hindrance, Disfavor
Example: “700,000 tons of food aid”
5) Recovery
Meaning: The action or process of regaining possession or control of something stolen or lost.
Synonyms: Recuperation, convalescence
Antonyms: Relapse, deterioration
Example: “A team of salvage experts to ensure the recovery of family possessions”
6) Ease
Meaning: Make (something unpleasant or intense) less serious or severe.
Synonyms: Relieve, alleviate, mitigate
Antonyms: Aggravate
Example: “A huge road-building programme to ease congestion”
7) Commit
Meaning: Pledge or bind (a person or an organization) to a certain course or policy.
Synonyms: Carry out, do, perform, perpetrate
Antonyms: apathetic
Example: “They were reluctant to commit themselves to an opinion”
8) Midst
Meaning: In the middle of.
Synonyms: Middle, centre, midpoint
Antonyms: Exterior, Outside
Example: The left his flat in the midst of a rainstorm”
9) Headwinds
Meaning: A wind blowing from directly in front, opposing forward motion.
Example: The runners had to battle against a stiff/strong headwind.
10) Deficit
Meaning: The amount by which something, especially a sum of money, is too small.
Synonyms: Shortfall, deficiency, shortage
Antonyms: surplus, profit
Example: “An annual operating deficit”
11) Adversely
Meaning: In a way that prevents success or development; harmfully or unfavorably.
Example: “His self-confidence was adversely affected for years to come”
12) Imposed
Meaning: Force (an unwelcome decision or ruling) on someone.
Synonyms: Levy, charge, exact
Antonyms: Free
Example: “sanctions imposed on South Africa”
13) Diversifying
Meaning: Make or become more diverse or varied.
Synonyms: Branch out, vary output, expand
Antonyms: Continue, Remain, Conform
Example: “The company expanded rapidly and diversified into computers”
14) Wean
Meaning: be strongly influenced by (something), especially from an early age.
Synonyms: Discourage, halt, Remove
Example: “The doctor tried to wean her off the sleeping pills”
