New Delhi: The
government Monday ruled out a roll back of its decisions to open
up the retail industry and hike diesel prices even as some of its
allies and an united opposition tested its resolve and promised
more policy initiatives in the coming days.
"To my knowledge there is no question of any rollback (of diesel
price hike)," Finance Minister P. Chidambaram said
Asked whether the government has risked its stability, he said, "I
do not think government faces any threat. Government is stable.
Our allies in the government and outside will understand and
continue their support to the government. We will be able to
convince our allies."
"I think clearly, political government knows what is doable and
what is not doable. We have done what is doable," Chidambaram said
while interacting with a select group of journalists.
The government hiked diesel price by a record Rs.5 per litre and
opened the multi-brand retail and aviation sectors to foreign
direct investment (FDI).
"These (price hike) were not only necessary but imperative to keep
the economy moving. There are grave external and internal threats
to the economy," said Chidambaram.
The opposition parties, trade unions and shopkeepers are set to
hold a nationwide strike Thursday against the government's
Regarding fuel prices, the finance minister said that the country
should accept the principle of market-linked commodity prices.
"We have to make corrections (to commodity prices) as they go
along in the commodity market."
The petroleum ministry in a notice in leading English and regional
language dailies said India needed to import 74 percent of its
crude oil requirements at international rates, which had risen
sharply and was compounded by the rupee's steep fall against the
"Once we put it to the allies (about the economic constraints
behind the decision) I'm sure they will understand. I can quote
what Chief Minister West Bengal said the day before and I quote I
understand the gravity of the economic crisis, unquote,"
The oil ministry in its public notice said the state governments
do not bear the subsidy burden and the record Rs.5 hike in diesel
price will yield states an additional revenue of Rs.8,200 crore
per annum. Therefore, it argued, the states can forgo this
additional revenue to provide relief to the common man by lowering
Earlier in the day West Bengal Panchyat minister Subrata Mukherjee
accused the centre of attempting to destroy the country's federal
structure by trying to block the limited avenues of states'
"I don't know the game plan behind this advertisement, but it is
for sure they (union government) are trying to destroy the
country's federal structure...Our party leader Mamata Banerjee
will never allow this to happen," said Subrata Mukherjee.
However, alliance leader Congress party talks were on to bring
allies around. "(We) appreciate her (Trinamool chief Mamata
Banerjee's) complusions. We remain hopeful," spokesperson Renuka
Chowdhury told media persons.
Meanwhile, the Delhi government announced that it would subsidise
three more cooking gas cylinders to those covered by its "Kerosene
Free Delhi" scheme, in addition to the six LPG cylinders provided
by the central government.