Montek backs diesel price hike; favours fuel price deregulation

Says more such tough decisions needed to achieve 8.2 percent growth target in 12th plan period

prasanna

Prasanna Mohanty | September 14, 2012



Planning commission deputy chairman Montek Singh Ahluwalia has strongly supported the hike in diesel prices and said the government needed to take a lot of tough decisions such as this to achieve an 8.2 percent growth rate during the 12th five-year plan.

“Raising fuel prices is always a problem. But the real question is could the government afford not to? My view is: No. Several committees looked into it and held that the general purpose fuel (which is what diesel is) should not be subsidized and that the targeted subsidy is okay (which is reflected in capping the number of subsidized LPG cylinders to six),” he said talking to reporters here today.

He said no hike would have meant one of the two consequences: a higher deficit, which would mean a cut in plan expenditure or bankruptcy of the petroleum sector. “The planning commission view is that both petrol and diesel should be completely de-regulated, which is not the case now, and this should be done step by step.”

Hike in diesel prices, Singh said, created a substantial fiscal space which could otherwise have been done either by taxation or slashing plan expenditure and hoped that the rating agencies would take note of it. “There was a perception that no matter what diesel price will not be hiked. That will change,” he added.

As for fixing the growth target for 12th plan, Singh said even 8.2 percent was an “extremely ambitious one” and could be achieved only if some tough decisions were taken. He didn’t elaborate what other steps needed to be taken though.

The plan panel had fixed a 9 percent growth target for the 11th plan period. Though it ended at 7.9 percent, with growth sliding down to 5.5 percent in the last quarter, Singh was happy with the achievement. He said Indian economy weathered two global crises and ranked second only to China in terms of growth. The record on inclusion was also good with data showing a rapid decline in poverty and marked improvement in agriculture growth and consumption in rural areas.

The full planning commission will meet tomorrow to finalise the 12th plan after which it will be taken up by the National Development Council (NDC) sometime next month for final approval.

Comments

 

Other News

India faces critical shortage of skin donors amid rising burn cases

India reports nearly 70 lakh burn injury cases every year, resulting in approximately 1.4 lakh deaths annually. Experts estimate that up to 50% of these lives could be saved with adequate access to skin donations.   A significant concern is that around 70% of burn victims fall wi

Not just politics, let`s discuss policies too

Why public policy matters Most days, India`s loudest debates stop at the ballot box. We can name every major leader and recall every campaign slogan. Still, far fewer of us can explain why a widow`s pension is delayed or how a government school`s budget is actually approved. That

When algorithms decide and children die

The images have not left me, of dead and wounded children being carried in the arms of the medics and relatives to the ambulances and hospitals. On February 28, at the start of Operation Epic Fury, cruise missiles struck the Shajareh Tayyebeh school – officially named a girls’ school, in Minab,

The economics of representation: Why women in power matter

India’s democracy has grown in scale, but not quite in balance. Women today are active participants in elections, influencing outcomes in ways that were not as visible earlier. Yet their presence in legislative institutions continues to lag behind. The Nari Shakti Vandan Adhiniyam was meant to addres

India will be powerful, not aggressive: Bhaiyyaji

India is poised to emerge as a global power but will remain rooted in its civilisational ethos of non-aggression and harmony, former RSS General Secretary Suresh `Bhaiyyaji` Joshi has said.   He was speaking at the launch of “Rashtrabhav,” a book by Ravindra Sathe

AI: Code, Control, Conquer

India today stands at a critical juncture in the area of artificial intelligence. While the country is among the fastest adopters of AI in the world, it remains heavily reliant on technologies developed elsewhere. This paradox, experts warn, cannot persist if India seeks technological sovereignty.


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter