Roll-back of the diesel price hike will have serious implications on the credibility of the Government, Planning Commission Deputy Chairman Montek Singh Ahluwalia said here today.
“In my view, the Government has taken this decision (of diesel price hike) after a lot of consideration. There should not be a diesel price hike roll back at all. If the Government rolls back the diesel price then its credibility will be zero,” Ahluwalia told presspersons on the sidelines of the SKOCH Summit.
The Government’s decision to raise the price of diesel by over Rs 5 per litre last week evoked a sharp reaction, leading to the widespread demand for its roll back.
According to Ahluwalia: “From the economic point of view, our diesel prices are lower than those of our neighbouring nations. If we continue with this (subsidy on diesel), then either our oil companies will get bankrupt or our fiscal deficit will increase so much that we would have to cut Plan expenditure on health and education.”
Aligning domestic fuel rates with global prices, he said, was also necessary to achieve rapid economic growth and ensure efficient use of energy sources.
He further said it was necessary to cut the diesel subsidy as it was not going to the needy people but to those “who are driving cars”.
Ahluwalia said India has the largest fiscal deficit among the emerging market economies. “I think it will be disastrous to follow that route. It is unfortunate that in the political space, the issue is not being addressed.”