homenews

Budget has elements that address rural demand; crude oil a bigger risk to economy, says CEA Anantha Nageswaran

news | Feb 1, 2022 7:48 PM IST

Budget has elements that address rural demand; crude oil a bigger risk to economy, says CEA Anantha Nageswaran

Mini

Hours after Finance Minister Nirmala Sitharaman presented her fourth union budget in the Parliament, Chief Economic Adviser Anantha Nageswaran told CNBC-TV18 the budget 2022 has "certain elements" that address the rural demand. He also said the single big risk to the economy right now is the rising crude oil prices.

The budget 2022 has "certain elements" that address the rural demand, Chief Economic Adviser Anantha Nageswaran told CNBC-TV18 Tuesday after Finance Minister Nirmala Sitharaman presented her fourth budget in the Parliament, which experts touted was "growth-centric". The budget comes in face of the aftermath of the second and third waves of the coronavirus pandemic that resulted in job losses and sent inflation surging.

Recommended Articles

View All

In his first interview after taking over as CEA, Nageswaran spoke about the elements in the budget that addresses the rural demand. "One is the allocation to the Prime Minister's Gram Sadak Yojana and the entire credit guarantee is going to be revamped, and an additional tool has been developed for that. And then we have the MSP and record procurement happening. We also have the PM Kisan Scheme, which is a demand-driven program," he counted.
So, we have enough cushion to help the demand recovery, he said. He further added that economic stress is high because of the pandemic cloud, which is still keeping people uncertain and restrained in their spending. "We would see that once the pandemic cloud lifts, I think the consumer sentiment and spending habits would come back to a normal growth pattern," Nageswaran said.


Nageswaran said the crude oil is a bigger risk for the economy, bigger than a hawkish Federal Reserve, and monsoon. While monsoon is too early to talk about and regardless of how taper proceeds in the US, the fall out on India should be very, very manageable, which leaves crude oil, which, he said, is a "risk the world economy faces and not just India."
Brent crude oil prices are trading close to $90, as the prices rose in response to tensions in the Middle East and Europe. However, the oil cartel OPEC+ adding to oil supplies this week could reduce the pressure on prices.
CEA said the answer for a high oil price is a high oil price because that's what brings demand. He said, from April onwards, over the course of the next 12 months, the assumption of crude oil trading in the range of $70-75 per barrel is not unrealistic. And this 8-8.5 percent jump is a "manageable risk," but it is "something we need to watch out for," he added.

For all the latest updates on Union Budget 2022, follow our LIVE blog here. For full coverage of Union Budget 2022, click here.

Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!

Top Budget Opinions

    Most Read

    Market Movers

    View All
    Top GainersTop Losers
    CurrencyCommodities
    CompanyPriceChng%Chng