New Delhi: This is for the second time that Prime Minister Manmohan Singh has expressed concern about the impact of rising oil and commodity prices and protectionist policies of developed economies on liberalisation. He has urged the world to take proactive steps in managing the third oil crisis.
While speaking at the Assocham annual general meeting today, the Prime Minister said: “Many developing countries have been forced to impose control on commodity exports and increase subsidy on imports due to rise in food prices”. At the CII annual general meeting held in April, the Prime Minister had raised concern about the poor international response to the global food and fuel crisis.
“The situation cannot continue forever,” he said. “We need wider political consensus at home to adopt more rational economic policies. The government can insulate poor people up to a point but the need of the hour is economic pricing of oil so as to sustain growth”.
He pointed out that his government had not raised kerosene prices for the past four years while diesel and LPG prices were only marginally revised, and petrol prices remained lower than world oil prices.
“We cannot allow the oil subsidy bill to rise any further, nor do we have the margin to fully insulate the consumer from the impact of world commodity and oil price inflation”, he said, indicating that a hike in petrol and diesel prices was on the anvil.
Seeking industry support for taming the price rise, Dr Singh said: “I do not wish to see a return to an era of blind controls. At the same time, we have to have the fiscal means to protect the poor from adverse impact of inflation”.
“The unrelenting rise in crude oil prices threatens to disrupt the development process in oil importing developing countries,” he said.
“India has maintained an economic growth of 9 per cent and above for the past three years and we are confident that the Indian economy would continue to grow at 8 per cent and above despite global slowdown”, he added.
Referring to the middle-path of economic reforms adopted by the country, he said the Indian route to globalisation had been more stable and avoided many pitfalls that other developing countries got into.
“It bears a testimony to the wisdom of the slow and steady wins the race,” he said.
