Govt cannot insulate the consumer from global food, oil prices

New Delhi, June 2 (UNI) Calling for a political consensus for adopting more "rational economic polices," Prime Minister Manmohan Singh today said the government does not have the margin to "fully insulate" the consumer from the impact of rising world commodity prices and oil price inflation.

"We cannot allow the subsidy bill to rise any further. Nor do we have the margin to fully insulate the consumer from the impact of world commodity prices and oil price inflation. Economic pricing of scarce natural resources, be it water or oil, is essential to the sustainability of our growth process," Dr Manmohan Singh said opening the 87th Annual General Meeting of ASSOCHAM.

The Prime Minister's statement was an indication that the government was set to raise the prices of petrol and petroleum products and sought a political consensus on the issue, which had alluded it so far.

The Prime Minister said his government was focussed on reversing the recent surge in headline inflation rates adding that the mix of polices that have been adopted will yield results once the full impact of a normal monsoon is felt.

"However, to ensure the stability and sustainability of the growth process we have to follow more prudent fiscal policies", he said.

The Prime Minister said it has been the endevour of the UPA government to tame inflationary expectations without hurting the "rhythym of the growth process" and also to protect the weaker sections against rising prices.

Dr Manmohan Singh stressed the need for a global compact between oil producers and and the developing world as the unrelenting rise in crude oil prices threatens to disrupt the development process of oil importing countries. "It can have adverse consequences for the global war against poverty." Similarly, the Prime Minister said, there was need for a new global compact on commodities so that the rising food prices do not threaten the process of global integration.

"We need global leadership. We need greater global compassion," he said.

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