The Planning Commission on Monday described the political opposition to the fuel price hike as "completely illogical", even as the BJP-led National Democratic Alliance (NDA) and Left Parties went ahead with a nationwide strike to protest against rising prices.
"It is completely illogical to oppose the fuel price hike unless it is your view that you should drive the country into economic policies which do not make any sense," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on the sidelines of a conference on developing state highways.
The Bharatiya Janata Party-led NDA and Left Parties, including the CPI-M and CPI, have organised a "Bharat Bandh" to protest against rising inflation and the hike in prices of petrol, diesel and cooking gas.
Even Finance Minister Pranab Mukherjee had on Sunday ruled out any rollback of the fuel prices announced by the government last month.
On June 25, the government raised the prices of petrol, diesel and kerosene by Rs 3.50, Rs 2 and Rs 3 a litre, respectively, and increased the rates for cooking gas by Rs 35 a cylinder.
"Even with the price hike, kerosene is heavily subsidised. Both LPG and kerosene are still heavily subsidised. They are still cheaper in India than in Sri Lanka, Bangladesh and Nepal. The notion that prices have been raised usually and unfairly is not actually correct," Ahluwalia said.
The hike in prices of petroleum goods, however, is likely to have a cascading effect on inflation, which is ruling high.
Wholesale prices-based inflation crossed double-digits (10.16 per cent provisionally) in May, but as per the final figures, the rate of price rise has been 11 per cent or more since February. Food inflation, however, eased to 12.92 per cent in the third week of June from above 16 per cent.
Admitting that inflation is high currently, Ahluwalia said, "Allow a little bit of time. When people perceive that global demand is good and there are good signs of monsoon, the inflation will be back in comfortable zone by the end (of) this year (December)."
He further said that by December, "The inflation will be lower and growth will be good."
During the current fiscal, the economy is expected to grow by around 8.5 per cent, up from 7.4 per cent in the previous fiscal.