On a day when the Government was battling the political fallout of the petrol price hike, its Economic Advisor pitched for freeing diesel prices to take the pressure off inflation, even as the Finance Minister said it would adversely impact inflation.
“I personally believe we should decontrol diesel prices, which will take some pressure off the fiscal burden. In the long run, it will cause inflation to go down,” the Chief Economic Advisor, Mr Kaushik Basu, said.
The Finance Minister, Mr Pranab Mukherjee, however, said the latest petrol price hike would impact inflation, which is hovering close to the double-digit mark.
“Of course, it will have some adverse impact on inflation,” he told newspersons.
On why UPA allies were not kept in the loop, he said, “Nobody in the Government knows... because petrol prices are increased by the petroleum companies, not by the Government.”