Avoiding impact of wide protest against hike fuel prices, Prime Minister’s Economic Advisory Council Chairman C Rangarajan demanded quick implementation of hike in prices of diesel and LPG cooking gas, in wake to cover all necessary fiscal deficit at 5.1 percent of the GDP during 2012-13.
Mandatory for government expenditures, Rangarajan said, “There is a need to raise the prices because the fiscal deficit can be contained only if we act on cutting subsidies and the most important element in subsidies is the petroleum subsidy. Therefore, there is a need for action with respect to the prices of diesel and LPG.”
As per him, the action over increase in prices of diesel and LPG should be taken as soon as possible to bear cost of subsidiaries that is likely to be over Rs 60,000 crore in the current fiscal.
Indian’s foreign reserves at present has been over USD 290 billion, but value of rupee declines continuously and it has as low of 56.52 against US dollar because of withdrawal of funds by foreign institutional investors.
Source said, the government that have foreign exchange reserves, is expected to take serious steps to encourage capital flows, removing the hurdles that come in the way of the investors block foreign investment.
It is planning to take immediate actions to push reforms of FDI in multi-brand retail pension and insurance and other sectors to promote growth in wake to set up consensus, while there are several hurdles from side of Opposition allies.
While questioning about increase price effecting inflation, Rangarajan told reporters that high levels of inflation are not conducive for growth, while RBI to take steps to contain inflation along with the central bank’s main aim to firstly check price rise.
