Ramesh slams govt for fuel subsidies

Union minister for rural development Jairam Ramesh on Tuesday criticized the government policy of subsidising fuel charges. HT reports.

Union minister for rural development Jairam Ramesh on Tuesday criticized the government policy of subsidising fuel charges.

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The comments come on a day when bowing to public resentment against hikes in fuel prices, the oil companies slashed the petrol prices by Rs 2 per litre.

Ramesh said the subsidy burden is more than that for the development schemes in the country.

"I believe that fuel subsidies are perverse subsidies. We spend today roughly Rs 1,10,000 crore on subsidy on diesel, kerosene and LPG, which is more than what we spend on rural development programmes," Ramesh said.

The cabinet minister cautioned that the problem will intensify if petrol prices are hiked without touching diesel.

"Fifteen per cent of diesel consumption is in cars and 8% of diesel consumption is in captive power generation. I mean 23% of diesel is going into areas where diesel should not be used and that is a direct consequence of pricing," Ramesh said.

The minister though said no government could bring in a policy change overnight in a country 'where millions of farmers depend on diesel engines to pump water for their crops'.

(With PTI inputs)