Irresponsible to say petrol rate hike anti-people: Montek
Refusing to call the hike in petroleum prices as anti-people, Planning Commission Deputy Chairman Montek Singh Ahluwalia osaid inflation would have gone much higher three months down the line had fuel prices not been increased.
By PTI |
NEW DELHI: Refusing to call the hike in petroleum prices as anti-people, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Thursday said inflation would have gone much higher three months down the line had fuel prices not been increased.
He also said inflation would ease in next four months on anti-inflationary measures taken by government and the hike in petroleum price would add 0.5 per cent to overall inflation.
"It is irresponsible to say that it (hike) is anti-people. Failing to act would have been irresponsible, fiscally imprudent and would have led to a much bigger damage three months down the road," he told reporters on the sidelines of a seminar on agriculture here.
The government yesterday announced raising prices of petroleum products. Price of petrol was hiked by Rs 5 a litre, diesel by Rs 3 per litre and LPG by Rs 50 a 14-kg cylinder.
"It (inflation) would depend on the world prices, but it would be lower than the current level four months down... The direct effect of what has just been done (petroleum price hike) will probably be about 0.5 per cent," he said.
He added "if other measures we have taken start bringing down inflation, I hope it will not go to double digit".
The other option before the government, he said, was not to raise the fuel prices and subsidise through the budget and increase the fiscal deficit.
"But by doing this (hike) the price of fuel goes up. But because you are not creating liquidity through the budget, other inflation will be better controlled," he opined.
He also said inflation would ease in next four months on anti-inflationary measures taken by government and the hike in petroleum price would add 0.5 per cent to overall inflation.
"It is irresponsible to say that it (hike) is anti-people. Failing to act would have been irresponsible, fiscally imprudent and would have led to a much bigger damage three months down the road," he told reporters on the sidelines of a seminar on agriculture here.
The government yesterday announced raising prices of petroleum products. Price of petrol was hiked by Rs 5 a litre, diesel by Rs 3 per litre and LPG by Rs 50 a 14-kg cylinder.
"It (inflation) would depend on the world prices, but it would be lower than the current level four months down... The direct effect of what has just been done (petroleum price hike) will probably be about 0.5 per cent," he said.
He added "if other measures we have taken start bringing down inflation, I hope it will not go to double digit".
ADVERTISEMENT
"It (inflation) certainly would be lower than what it could have been otherwise. Only thing is we will have to be patient," he said. The other option before the government, he said, was not to raise the fuel prices and subsidise through the budget and increase the fiscal deficit.
"But by doing this (hike) the price of fuel goes up. But because you are not creating liquidity through the budget, other inflation will be better controlled," he opined.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
