Govt needs to raise petroleum prices: Ahluwalia

New York: Dismissing the perception of policy paralysis surrounding the union government, Planning Commission Deputy Chairman Montek Singh Ahluwalia feels the government should raise petroleum prices as part of tough decisions and to attract international investment.

He feels people must be educated on the importance of raising fuel prices so that petroleum sector does not go bankrupt. “I would certainly hope so. Certainly all the advice that we would be giving (to the government) is that India has tremendous opportunity to look good and to attract investment in a world which is very uncertain and we should not miss that opportunity,” Ahluwalia told PTI in an interview.

He was asked whether the government would be willing to take tough decisions to put its economy on the path of high growth.

He underlined the need for restoration of fiscal credibility, action on the underpriced petroleum products and taking care of implementation bottlenecks in infrastructure projects as being measures that should be very high on the government’s agenda.

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[caption id=“attachment_315894” align=“alignleft” width=“380” caption=“Ahluwalia said the view in the Planning Commission on fuel subsidies is very clear that “fuel prices just have to be adjusted.AFP”]  [/caption]

“Even if a little block is removed, it will create a revival of confidence that the country is on the right track,” he added.

Ahluwalia said the view in the Planning Commission on fuel subsidies is very clear that “fuel prices just have to be adjusted.

“It is obvious from a technical and economic point of view, the case is absolutely overwhelming. In practice, political realities also have to be taken into account and governments very often have to decide when they want to do it. There is absolutely no doubt in my mind we just have to raise fuel prices,” he said

Ahluwalia said people must be educated on the importance of raising fuel prices.

In the case of petroleum, 80 percent of the fuel is imported “so not to charge for the price which you are being made to pay is basically bankrupting the petroleum sector. Either that or the budget has to bear a huge burden of subsidy and neither of those is sensible.”

PTI