New Delhi, July 7: India totally disagreed with International Monetary Fund's (IMF) observations that the country would find it difficult to manage oil shocks due to weak fiscal position. The finance ministry would soon respond to IMF's observation made in its recent country review, official sources said, adding that the fund's views were irrational in the face of comfortable balance of payment and over 57 billion dollar forex reserves.
IMF had said that India's mounting fiscal deficit of 5.9 per cent last fiscal left little room for excise concessions on petroleum products and that government should come out with a strategy to deal with international price hike.
Official sources said the crude oil prices were being monitored regularly and the country's sizeable forex reserves was capable of meeting the oil price shocks.
So the IMF's forecast that the country could face a drying up of inflows and a draw down pressure on NRI deposits in the worst case scenario of oil price hike, was far-fetched, official sources said.
Also, sources said India was no longer bound to IMF as the country had no debt obligation to the fund which provides structural adjustment facility to developing countries in the event of balance of payment crisis. Bureau Report