Roll back diesel prices, YSRCP


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

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

A Somayajulu)

Political Affairs Committee





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