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PM says oil subsidies must go
Published on 30 Jun. 2010 12:11 AM IST
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Saying that people will understand the perils of excessive populism that was bad for the economy, Prime Minister Manmohan Singh Tuesday said diesel prices, like petrol prices, would not be subsidised anymore by the government as “much-needed reforms” were needed in the pricing structure of fuels.
“Subsidies for petroleum products have reached a level which is not connected to sound financial management of our economy,” he told reporters on the way back to New Delhi after attending the G20 Summit in Toronto.
“The fact that petrol prices have been set free, the same is going to be done to the diesel prices - (these are) much needed reforms,” he said, referring to the decision of an empowered group of ministers Saturday.
The ministerial panel led by Finance Minister Pranab Mukherjee had allowed state-run fuel retailers to freely fix the prices of petrol, while on diesel any hike over and above Rs.2 per litre was subjected to a nod from the oil ministry.
The prime minister said these adjustments, including those on the prices of kerosene and cooking gas, were necessary, considering the high amount of subsidy that was implicit in the pricing structure of these fuels.
“But we have taken due care to ensure the interests of the poorer sections are affected to the least possible extent. That’s why the attempt to keep under regulation the prices of kerosene and LPG (liquefied petroleum gas),” he said. “I think it is manageable.”
The prime minister said he had only read the views of opposition parties, but as far as he was concerned people would appreciate the compulsions the government had been subject to in order to undertake this measure.
“Our people are wise enough to understand that excessive populism should not be allowed to derail the progress our country is making, and for which it is winning kudos internationally as well,” he added.
The prime minister also ruled out tax on overseas capital flows, saying the situation for that had not arisen.
All-India shutdown
The Left parties, AIADMK, Telugu Desam Party, Samajwadi Party, Biju Janata Dal (BJD), Janata Dal-Secular (JD-S) and the Indian National Lok Dal (INLD) Tuesday called for a countrywide dawn-to-dusk strike July 5 to protest against the fuel price hike. The shutdown would be from 6 a.m. to 6 p.m.
The parties accused the Congress-led government of giving “another cruel blow” to the people by removing controls over petroleum pricing and raising the prices of petrol, diesel, kerosene and cooking gas.
“This (shutdown) comes after its (central government’s) refusal to take any effective step to curb price rise of food items and essential commodities which is causing suffering to the people,” said a statement jointly issued by the Left parties here.
AIADMK leader D. Maitreyan said that people have realised the true colour of the UPA government, which came to power in the name of “aam aadmi” (common man). TDP termed it as “unfortunate”.

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