Plan panel deputy chairperson Montek Singh Ahluwalia on Friday backed the diesel price hike saying the country’s needs lot of tough decisions to cut down fiscal deficit so that more money is available for development.
“Diesel price hike is a tough decision and we need lot of tough decisions to get to 8 % growth rate,” he said. The plan panel had set a target of 8.2 % growth for the 12th plan with an aim to grow at 9% in the terminal year of the plan, 2017.
Ahluwalia said the hike was among several tough decisions the Centre needed to check growing fiscal deficit, which would mean less money for development.
“Diesel price needs to be totally regulated to align with global prices,” he said, adding that any increase in diesel prices will not have much impact on inflation.
An immediate implication, he felt, fiscal consolidation would provide space to the Reserve Bank of India to reduce interest rates, a demand being made by the industry for a long time to attract investment. The RBI would be announcing its mid-term monetary policy next week.
NCP takes to streets
The NCP organised a protest march in Mumbai, where Vidya Chavan, chief of the party’s women’s wing said, “If the government is being unfair to the poor, then we have to come out on the streets.” The party also held protests in Aurangabad.
BJP provokes Didi
BJP, which organised rallies in 37 places in Kolkata, taunted ruling Trinamool Congress chief Mamata Banerjee. BJP leaders asked that if she was genuinely opposed to the UPA govt’s policies, what stopped her from withdrawing support.
Meet allies, says DMK
DMK joined key UPA allies in demanding a rollback of the fuel price hikes, with party chief M Karunanidhi saying in Chennai that UPA chairperson Sonia Gandhi should call a meeting of the alliance’s coordination committee to discuss the hikes.
No hike in rail fares
Railways will absorb the additional burden of Rs. 1,250 crore caused by the diesel price hike, a senior official said in Delhi. Its 5,450 diesel locomotives plying the 64,000-km network consume more than 250 crore litres of diesel per year.