But how would the economy have looked if oil had stayed high - or gone higher?
India imports around 80 per cent of its oil requirement. In the month the United Progressive Alliance (UPA) presented its last - interim - Budget, February 2014, oil imports made up 40 per cent of India's total merchandise imports. A halving of the price of oil has naturally had a sharp effect on India's import bill. In March 2014, India's oil import bill was $15.6 billion; in August 2014, it was $7.3 billion, only 22 per cent of India's total merchandise imports that month.
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A current account deficit at 3 per cent
Had India's import bill been double of what it is now, the current account deficit would not have been the comfortable 1.2 per cent of gross domestic product (GDP) it was in the April-June quarter of 2015. That was $6.2 billion.
But the oil import bill for that quarter was $24.6 billion, $16 billion less than the import bill in April-June 2014. But oil prices affect India's export receipts too. Lower crude prices mean oil products are 12.6 per cent of India's exports since April this year, down from 18.6 per cent in the last financial year - a six percentage point drop.
Had exports been that additional six percentage points higher in April-June this year, that would have brought in an additional $6.1 billion. Subtract that notional loss from the $16-billion gain, and it could be argued that India saved just under $10 billion on the current account.
Without those savings, the April-June current account deficit would have been $16.1 billion - easily over three per cent of GDP, and could have expanded further because of seasonal reasons.
A country with a current account deficit of three per cent would have been viewed very differently by global investors at a time of fragility than one with a current account deficit of 1.2 per cent.
Political pressure due to inflation
The government's political position has been bolstered by the moderation of inflation. In Delhi, petrol prices are 14.5 per cent lower since July 2014, and diesel prices are 21 per cent lower. This has happened even as full deregulation of diesel has happened - which means that, in a what-if scenario, the price of diesel in particular would have been 25 per cent higher than it is today, with a corresponding cascading effect on other prices. The political effect of continued inflation in this scenario is easy to imagine.
From August 2013 to June 2014 inclusive, the average year-on-year inflation - according to the Wholesale Price Index - in fuel and power was 10.55 per cent. In 2015 so far, the average year-on-year disinflation in fuel and power has been 12.33 per cent. The effect of lower fuel prices on electricity prices has been particularly stark - from 27 per cent year-on-year increases in power prices in March 2014, India is down to two per cent increases today. Had this reduction in power and fuel prices not taken place, not only would political pressure have come to bear on the government, but the task of reorganising coal-fired power plants and state electricity boards would have been even more politically fraught. Power reforms might have been solidly on the back burner.
No chance of fiscal consolidation
Given the complicated relationship between the government and oil - it pays out some subsidies that increase with oil prices, but on the other hand earns money from taxes on oil - the fiscal maths is not clear, and is dependent on whether subsidy control would have happened at the same rate or a slower or faster rate.
But it is no coincidence that in August 2015, India showed a surplus in its fiscal balance for the first time in eight years. The summer of 2007, eight years earlier, was when oil rose steeply from $60 a barrel to $92 a barrel in October - the level it maintained or exceeded in the years thereafter except for a relatively temporary panic-fall after the financial crisis hit.
The research ratings agency, Icra, has estimated that the government will save a giant Rs 88,000 crore from cheaper oil imports in 2015-16. Had the Centre had Rs 88,000 crore less to spend, it would have added an additional 0.6 per cent of GDP to India's fiscal deficit in 2015-16, sending it up to 4.5 per cent of GDP instead of the target of 3.9 per cent of GDP - the same as in the UPA's last year of 2014-15.
The government would have had to either avoid the fiscal consolidation path and stay with UPA-level fiscal deficits, or forget about the Rs 70,000-crore infrastructure spend that is sustaining demand and thus growth at the moment. Either growth would have been significantly below the roughly seven per cent mark it is now, or India would have been hammered by global capital for unsustainable finances.
... And India Inc up in arms
The oil marketing sector - in particular, Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) - would be doing a lot worse. Cheap oil means that their working capital requirements are lower. So are losses from selling LPG and kerosene below market prices. HPCL's stock price is more than 80 per cent higher than it was in July 2014; BPCL's is more than 40 per cent higher.
On the other hand, Oil India and Oil and Natural Gas Corporation (ONGC) Ltd would not be struggling with their topline. ONGC is down almost 40 per cent since July 2014; fellow Sensex component Reliance Industries Limited (RIL) is down 12 per cent. Through ONGC and RIL, cheaper oil would have tended to push the Sensex down.
But, overall, India Inc would really have been suffering. With high oil price-based inflation, demand would have been even weaker than it is now.
And companies have used the period since oil began to drop to dramatically cut costs. In the quarter ending June 2014, the BSE 500 companies saw raw material costs expand over 15 per cent year-on-year. In the quarter ending June 2015, raw material costs fell 17 per cent year-on-year, after falling 20 per cent year-on-year the previous quarter. If India Inc is complaining now, it would have been up in arms without cheap oil.