SME Times News Bureau | 22 Sep, 2012
Prime Minister Manmohan Singh said Friday a Rs.17 per litre hike
in diesel price was needed to cover the losses and that the government only
partially passed on the burden to the common people.
"We raised the price of diesel by just Rs.5 per litre instead of the Rs.17
that was needed to cut all losses on diesel," the prime minister said in
an address to the nation.
The prime minister pointed out that much of diesel is used by big cars and
sports utility vehicles (SUVs) owned by the rich and by factories and
businesses.
"Should the government run large fiscal deficits to subsidise them,"
he asked.
The prime minister said taxes on petrol were reduced by Rs.5 per litre to
prevent a rise in petrol prices.
"We did this so that the crores of middle class people who drive scooters
and motorcycles are not hit further."
On the decision to put a cap of 6 subsidised cylinders per year, Singh said,
"Almost half of our people, who need our help the most, actually use only
6 cylinders or less. We have ensured they are not affected."
"We did not touch the price of kerosene which is consumed by the
poor," he said.
He said despite the recent increase, diesel and cooking gas prices were lower
in India than neighbouring
countries like Pakistan, Sri Lanka, Bangladesh
and Nepal.
"The total subsidy on petroleum products will still be Rs.160 thousand
crore. This is more than what we spend on health and education together. We
held back from raising prices further because I hoped that oil prices would
decline," he said.
