Savings on oil will help in funding social security schemes, says FM

Global oil prices slumping to a six-year low and the accompanying fall in commodity prices will help India save money on import bill that can be used to fund social security schemes as well as for infrastructure building, Finance Minister Arun Jaitley said on Friday.

"The shake up in oil prices... is a redistribution of wealth, from amongst the oil producing nations to oil consuming countries. And therefore oil consuming countries benefit today from this new redistribution, (the) result (of which) is oil prices falling to half," he said at a book release function in New Delhi.

With oil prices falling to record low of $40 a barrel, a significant fall in commodity prices has also happened.

"India fortunately is neither an exporter of oil nor an exporter of commodities, if at all we import some of them. Therefore, reduced prices help us to save a lot of money and use that money for social security, for infrastructure and redistributing wealth within the country," he said.

India, which imports close to 80 per cent of its oil needs, spent about $124 billion in 2014-15 on shipping oil. Jaitley said, in his opinion, that was no adversity between the impression that a more liberalised economy and a more integrated economy would adversely impact on distributive justice.