The hike in fuel prices last week does put some burden on the common man, Prime Minister Manmohan Singh acknowledged, but he felt it was manageable.
In an in-flight press conference on his way back from the G-20 summit in Toronto, Singh confirmed that diesel price — like petrol last week — will soon be deregulated, adding these were much needed reforms.
“The subsidies on petroleum products had reached a level that was not connected to sound financial management of our economy,” he said. “The adjustment made in prices of kerosene and LPG were also necessary, considering the very high subsidy that existed. We have taken care to ensure the poor are affected the least. That’s why we have kept kerosene and LPG prices under regulation.”
How would he tackle the uproar the opposition is bound to create over the hike? “Our people are wise enough to understand that excessive populism should not be allowed to derail the progress our country is making,” Singh said. Asked if he was satisfied with the talks at the G-20 summit, Singh said the current one was a preparation for the bigger summit in Seoul in November.
He added there had been broad agreement that the global economic recovery from the recession of 2008-09 was still fragile, and cautioned against hasty withdrawal of the economic stimuli many governments had provided.
“What is needed is a calibrated attempt at fiscal consolidation,” he said. “It must be done in a growth-friendly manner. My impression was that even those countries that came out with targets of fiscal consolidation at the summit have been going about their business with due caution.”
He noted that India had coped much better with the economic downturn than most other countries.
On Pakistan, the prime minister reiterated that his attitude remained “Trust – but verify.” “Only time will tell which way it will turn,” he added.