India will still spend 1.7 trillion on fuel subsidies this year.
In so-called third world countries, rulers spend massive amounts of money collected from the people, including through food taxes on subsidizing energy, most of which is largely consumed by the rich and industry.
Credit taken to subsidize energy which is ultimately accommodated by the central bank can depreciate currency and further impoverish wages earners and destroy lifetime financial savings.
Standard and Poor's said the moves were credit positive for Indian Oil Corporation, (IOC, Baa3 stable), and state-owned upstream oil companies, including Oil & Natural Gas Corporation Ltd. (ONGC, Baa1 stable).