Venezuela Crisis May Lead To Cheaper Crude Oil: Niti Aayog Member To NDTV

Dr Arvind Virmani, renowned economist and a member of the NITI Aayog, said he believes if the oil fields of Venezuela are revived within six months, more oil will reach the market, and crude oil prices will drop. This, he indicated, could be one of the potential fallouts of the turmoil in Venezuela -- which has the world's largest oil reserves -- on the international market.

In an exclusive interview with NDTV, Dr Virmani said: "Crude oil is very important for India. If this scenario occurs, it will benefit India, because crude oil will be cheaper in the international market". 

India purchases 80 per cent of its crude oil from major oil-exporting countries, and lower prices will save on import costs.

Dr Virmani said despite the continued uncertainty in international politics, the Indian economy is expected to grow slightly above 7 per cent in the 2025-26 financial year. 

"At the beginning of this financial year, I had forecast a GDP growth of 6.5 per cent with a gain of plus-minus 0.5 per cent. Now, it seems the Indian economy is heading towards a growth rate of 7 per cent in FY 2025-26. It may even reach slightly above 7 per cent," the renowned economist told NDTV. 

The Prime Minister, he said, has made it clear that economic recovery is progressing rapidly - mainly due to income tax reforms, improvements in the GST system, and the implementation of labor courts.

Regarding Union Finance Minister Nirmala Sitharaman's statement that simplification of customs duties would be the next major reform, Dr Virmani said, "Customs duty reform is essential because for a self-reliant India, we need to strengthen the domestic supply chain". 

Uncertainty in international economy is significant in manufacturing, "with some countries blocking the supply of rare earth metals," he added.

Dr. Arvind Virmani said he believes the Central government is moving forward with reforms, which would help propel India towards becoming a developed country by 2047.

"Public sector reforms are also underway on a large scale. If you spend more money on sectors like artificial intelligence and biotechnology, it is being done keeping in mind future needs," he said.  

It would also be crucial that all states take serious initiatives to become "developed states," Dr Virmani said. 

"States will have to pay special attention to land reforms, industrial land, and real estate development. They will have to focus on developing human capital... The rate at which electricity is supplied to industry also impacts industrial growth... If electricity is supplied to industry at twice the cost of production, it could impact industrial production," he said.