Pranab rules out rollback of fuel price

Finance Minister welcomes hike in repo rates

“There is just no question of a rollback,” Finance Minister Pranab Mukherjee reiterated to the reporters on the sidelines of an Assocham function here. Mukherjee was responding to queries whether the government might consider a review of its June 25 decision to de-control fuel prices that led to a sharp rise in prices of petroleum products.

The Opposition led by the BJP and the Left has called a nation-wide 12-hour shutdown on Monday to protest the government move, claiming that the Centre’s decision would dangerously stoke inflation and a hike in prices of essential commodities.
NDA working chairperson L K Advani, after a meeting of its leaders had said, “This may be the first time in the history of India’s politics that almost all political parties will participate in the Bharat Bundh.”

Referring to the Reserve Bank of India (RBI) hiking the repo rates, Mukherjee said it was an appropriate and welcome measure. “So far, as far as the interest rates are concerned, 25 basis point enhancement in the repo and reverse repo rate is appropriate and a welcome measure. I do hope it will be subsumed in the new policy statement which will be made by the RBI in the later part of this month,” the finance minister added. The repo rate is the rate at which banks borrow from the RBI.

The hike in prices of petroleum goods is likely to have a cascading effect on inflation, which is ruling high. Wholesale prices-based inflation crossed double digits (10.16 per cent provisionally) in May, but as per final figures, the rate of price rise has been 11 per cent or more since February. Food inflation eased to 12.92 per cent in the third week of June from above 16 per cent.

In order to contain inflation, the Reserve Bank of India on Friday raised the short-term lending and borrowing (repo and reverse-repo) rates by 25 basis points to 5.5 per cent and 4 per cent respectively.

Bundh unjustified, says Deora

As the Opposition gears up for a nation-wide strike on Monday to protest against fuel price hike, Petroleum Minister Murli Deora on Sunday said the call for bundh was unjustified as the price rise will have just a minimal impact on common man, DHNS reports from New Delhi.

“Bundh call is not only unjustified, but is also against the interest of the common man and the daily-wage workers who could be deprived of their wages. Besides, it could cause inconvenience to the public at large,” he said.

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