Opposition to raise storm over fuel price hike

Opposition Bharatiya Janata Party (BJP) and the Left parties are planning to raise a storm over petrol and diesel price hikes announced by finance minister Pranab Mukherjee in the Budget when parliament reconvenes tomorrow after a four-day break.

With prime minister Manmohan Singh ruling out a roll-back of the proposed hikes in the prices of petrol and diesel, members of Parliament belonging to both parties have convened separate meetings on Wednesday morning to chalk out their strategy in the two houses of Parliament.

Speaking to reporters accompanying him on his way back from Saudi Arabia, the prime minister ruled out a rollback of petrol and diesel prices, saying that such subsidies are not sustainable in the long run. He also said the economy is now in a position to absorb the increase in fuel without triggering inflationary pressure.

"Any increase in prices does hurt some people, but we have to take a long-term view," he said, adding that the effects would only be marginal.

"We cannot save people from inflation if we follow all populist fiscal policies," he said, adding that populist policies will lead to the erosion of the investment climate.

While higher prices of petrol and diesel would have some amount of ripple effects on the general price level and the economy as a whole, the prime minister said, populist fiscal policies will hamper creation of new jobs and income generation.