Decision to hike gas price 'disastrous': CPI

NEW DELHI: CPI today termed as "suicidal" the government's decision to hike prices of natural gas to near double from April 1 next year and said it will lead to a "dangerous situation of aggravating slowdown in the country and will further inflame the inflationary market".

It alleged the decision was taken "under pressure from a corporate house" and will lead to further increase in cost of industrial production and perpetuation of agricultural crisis.

"This is a diastrous decision. At least four cabinet members had opposed. Even a section of the bureaucracy was not in favour of giving in to the pressure of the corporate house," claimed CPI leader Gurudas Dasgupta.

He said that with the near doubling of gas prices from the present $ 4.2/mmBtu to 8.4/mmBtu, the total outgo is likely to be around 8 billion dollars in addition.

"Huge subsidy will be required to maintain the price of fertilizer, which government is unlikely to bear considering the present economic crisis, which means it will be passed on to consumers," Dasgupta said.

He said "farmers will receive a deadly blow, further leading to perpetuation of agricultural crisis. In the case of power, it will lead to an increase of more hike Rs 2 per unit and the subsidy will be a heavy burden on the state exchequer, because power subsidy is borne by a state government."

"It will increase the industrial cost of production, further aggravating the slowdown, likely to lead to increase in the power units and fertilizers prices and will further inflame the inflationary market," the CPI leader said.

Dasgupta said "this is a dangerous situation, an ad-hoc decision without due diligence by the government. It is an abject surrender of the arm-twisting policy of a single corporate house. It is once again a betrayal by the government and the downright surrender to the pressure of the corporates."

He said CPI will oppose it to the last through protests and seek rollback of the decision.

"We call upon and appeal to all political parties and state governments to effectively protest and oppose the government's suicidical decision," he said.

Biting the bullet, the government today approved near doubling of natural gas prices to $ 8.4 from April 1 next year, a move which will result in rise in power tariff, urea cost and CNG prices.