Tax sops to oil companies will be helpful: Ashith Kampani, JM Financial

Ashith Kampani, JM Financial, MD-Investment Banking, in a chat with ET Now talks about crude prices and the economy.

If crude prices move up by $1 per barrel Indian economy will lose about $1.2 billion, is it the biggest concern for us?

We have been dependent on the crude movement but when it fell to 75, we did not gain anything. So going forward, we need to keep in mind that our imports on the crude and dependence is going to increase as we keep on increasing our infrastructure, our capability to get more cars on the road and gasifying the whole country using the gas.

It is very important that if we are more dependent on usage of gas, then import of the crude comes down. So faster the gas infrastructure comes into the country, it is better for the country, it’s a win-win situation.

The other point is that most of these oil companies are importing crude. Instead, if they start buying from the existing people who are exporting crude, it also helps because that does not entail into the freight cost which is included while you import the crude. The third point is need to increase our own production capability, so any tax sops given to them will help us a lot.