Indian Merchants Chamber justifies fuel-price hike

By Staff
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Google Oneindia News

Mumbai, June 10 (UNI) A high growth rate of 9.3 per cent in the last quarter of 2005-06, has provided India with enough economic strength to face the challenge of soaring international prices, according to President of Indian Merchants Chamber Nayan Patel.

Mr Patel, in a statement issued here today said, ''Indian economy, is now well-poised to face the external economic pressures emanating from factors which are not under its control''.

He said ''in this context, we must appreciate the government's timely proactive move to raise prices of petrol and diesel and Reserve Bank's move to hike repo rates by 25 bps.'' The consumer and investor's confidence is now at its peak, foreign exchange inflows are continuing to increase, services and manufacturing sectors also outperformed all their previous records and prospects of a good monsoon are inevitably leading to a spurt in growth in the farm sector,'' he said.

''In view of these strong internal positive factors, the decision to increase reverse repo rate or to increase the price of petroleum products must not worry us because it is necessary to counter the external negative factors and that the external negatives can be effectively countered only by correcting the country's fiscal imbalance,'' Mr Patel said.

Mr Patel urged all political parties to recognise the international realities on the energy front and adopt a transparent formula-based, cost-plus price policy, without taking recourse to short-sighted populist political measures designed to serve narrow end of temporary electoral gains, in disregard of the country's long term interests.

UNI PVN KU VJ KN1405

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