Roll back diesel prices, YSRCP

PRESS RELEASE 

Roll back diesel prices, YSRCP 

The decision of Government of India to increase the diesel prices by Rs 5 per litre at this point of time is bound to adversely impact the already ailing Indian economy, with the inflation likely to sky-rocket shortly. The decision to restrict the subsidy on gas cylinders to just six per annum will also very adversely affect the budgets of middle class and the poor.

 The Government’s argument that they were compelled to increase the prices because of global price increases is not correct. The main factors responsible for the present state of Indian economy are the policy paralysis and governance paralysis, which have been in evidence during the last four years of UPA Government. The Trade Deficit of the country has gone up from $ 20 billion in 2005 to $ 185 billion in 2012. The Current Account Deficit that deals with foreign exchange has gone upto 4.5% of GDP as against Current Account Surplus in 2008. As a result of these mishaps, the rupee has substantially devalued against USD, the parity having gone Rs 40 per USD in 2009 to Rs 60 per one USD in 2012. As a result, the landed prices of crude in rupee terms have gone up despite the international prices of petroleum coming down.

The international prices of petroleum crude are based on daily trading in NYMEX. The cost of petroleum crude as on 4-7-2008 was $ 145 per barrel of 159 litters. The international prices have since fallen and the cost of one barrel as on 13-9-2012 is $ 97 i.e. $ 48 less per barrel than what it was 4 years ago. 

Because of the reluctance on the part of UPA Government in resolving several key economic issues, the GDP growth rate of the country fell almost to 5%, impacting the revenue growth adversely. The fact that revenue growth in 2011-12 was just 10.66% against previous year’s 25% is clear proof of mismanagement of the economy by the UPA Government. The Revenue Deficit which should be zero as per the FRBM Act 2003 is now 4% of GDP. The Fiscal Deficit which should be 3% of GDP is now 6% of GDP. All these clearly point to the gross inefficiencies of the UPA Government. To cover up their failures and non-performance, the UPA Government is penalizing the people. 

We demand that the diesel price hike be rolled back along with the restriction on subsidized gas cylinders. 

                                               (D A Somayajulu)

                                 Member, Political Affairs Committee

Dated: 14-09-2012