On a day the government was battling the political fall out of petrol price hike, its economic advisor pitched for a bold decision on freeing diesel prices, which he claims would eventually cool down inflation.
"I personally believe that we should decontrol diesel prices, which will take some pressure off the fiscal burden.
And in the long run, it will cause inflation to go down," Chief Economic Advisor Kaushik Basu said in an interview.
Inflation should ideally be below five per cent, he said.
"However, (it is) important to explain to our people that if we subsidise diesel artificially, by running up a large fiscal deficit, that would also exert an upward pressure on prices," Basu said.
In September, headline inflation was measured at 9.72 per cent and food inflation has risen to 9-month high of 12.21 per cent for the week ended Oct 22.
No comments:
Post a Comment