APSC Answer Writing (Daily) based on Assam Tribune – 28/03/2026

Model answer

Model Answer

Introduction

The recent surge in global crude oil prices due to the West Asia crisis has posed significant challenges for India, which is heavily dependent on imports. The government’s decision to cut excise duty on fuel while keeping retail prices stable reflects a balancing act between controlling inflation and maintaining fiscal discipline.

Fiscal vs Economic Trade-off

1. Inflation Control

• Fuel prices directly impact:
  • Transport costs
  • Food inflation
• Govt avoided price hike → protected consumers

2. Fiscal Pressure

• Excise duty cut → loss of revenue
• Increased fiscal deficit risk

3. OMC Burden

• Oil Marketing Companies absorb losses
• Affects financial sustainability

Energy Security Dimension

1. High Import Dependence

• ~80–88% crude imported

2. Geopolitical Risks

• West Asia instability
• Threat to supply routes (Hormuz)

3. Price Volatility

• Global shocks affect domestic economy

Government Measures

• ₹10 excise duty cut
• Export duty on petroleum products
• Strategic reserves utilisation
• Centre–State coordination (Team India approach)

Challenges

• Long-term fiscal sustainability
• Continued dependence on imports
• Balancing consumer welfare and economic efficiency
• Need for diversification

Way Forward

1. Diversify Energy Sources

• Reduce reliance on West Asia

2. Promote Renewable Energy

• Solar, wind, green hydrogen

3. Rational Pricing Mechanism

• Gradual alignment with global prices

4. Strengthen Fiscal Framework

• Enhance non-tax revenue

5. Expand Strategic Reserves

• Buffer against shocks

Conclusion

India’s response highlights the need for a balanced approach that safeguards economic stability without compromising fiscal health. Long-term solutions lie in energy diversification, structural reforms, and strategic resilience.