There is no need to panic, our economy is stable
http://www.dnaindia.com/report.asp?newsid=1166162
Friday, May 23, 2008 23:59 IST
There is a visible rise in the price of fuel, and there is a valid reason behind it. Since many years now, we haven't found a considerable mass of crude oil. The demand for fuel is rising day by day and there isn't an increase in the supply. So there is a rise in prices and, in turn, the common man is the one who has to suffer. This is a well-known market principle. But there is also a rise in our incomes at the same time. So I don't think it will be a problem. In spite of recession hitting the US economy, our economy is still quite stable.
Every human being has the tendency to adjust. For instance, not all people are comfortable using public transport. They will either have to adjust, or will be left with no other option but to pay more for the fuel and use their private vehicles.
This indicates the level of dependence of our population on crude oil, which then encourages a further rise in prices. With the rise in the price of crude oil, there is a rise in the standard of living at the same time. Crude oil is the best source of fuel for transportation due to its unique performance level. We need not fear about our future. Our rise in incomes will be balanced with the rise in fuel price.
V Shunmugam is chief economist,
Multi Commodity Exchange Ltd. of India.
He spoke to Shikha Shah
http://www.dnaindia.com/report.asp?newsid=1166162
Friday, May 23, 2008 23:59 IST
There is a visible rise in the price of fuel, and there is a valid reason behind it. Since many years now, we haven't found a considerable mass of crude oil. The demand for fuel is rising day by day and there isn't an increase in the supply. So there is a rise in prices and, in turn, the common man is the one who has to suffer. This is a well-known market principle. But there is also a rise in our incomes at the same time. So I don't think it will be a problem. In spite of recession hitting the US economy, our economy is still quite stable.
Every human being has the tendency to adjust. For instance, not all people are comfortable using public transport. They will either have to adjust, or will be left with no other option but to pay more for the fuel and use their private vehicles.
This indicates the level of dependence of our population on crude oil, which then encourages a further rise in prices. With the rise in the price of crude oil, there is a rise in the standard of living at the same time. Crude oil is the best source of fuel for transportation due to its unique performance level. We need not fear about our future. Our rise in incomes will be balanced with the rise in fuel price.
V Shunmugam is chief economist,
Multi Commodity Exchange Ltd. of India.
He spoke to Shikha Shah
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