By IANS
New Delhi : Prime Minister Manmohan Singh has ruled out a rollback of the fuel price hike announced Thursday, stressing that such a step would have a disastrous impact on the country’s economy.
“The increase is marginal. We have a situation where the world prices are rising,” the prime minister told reporters on the sideline of a book release function at his 7 Race Course Road official residence here Thursday evening.
“If we continue subsiding (the oil companies against rising crude prices), the fiscal system would collapse,” he maintained.
Asserting his government’s “endeavour to ensure that inflation does not get out of control”, the prime minister said he would ensure “the long-term stability of the growth process, rather than seek short-term gains that may have socially and politically destabilising consequences”.
The Indian cabinet, at a meeting Thursday presided over by the prime minister, approved a hike poric e of gasoline by of Rs.2 (5 cents) a litre and of diesel by one rupee a litre to ease the fiscal burden on oil firms. The Left parties, which support the central government from outside, opposed the hike and called for nationwide protests.
Asked about US ambassador David Mulford’s comments on the civilian nuclear deal, Manmohan Singh said: “I do not want to comment.”
Pressing for conclusion of the agreement during the Bush administration, Mulford had, in a TV interview last week, suggested that it was almost “now or never” for India to get it through as non-proliferation groups may force additional conditionalities on it.
Asked how long controversial Bangladeshi author Taslima Nasreen would continue to stay in India, Manmohan Singh said: “Whenever we take any decision, you will come to know first.”
Muslim fundamental groups have been demanding that her visa – valid till Feb 17 – be cancelled due to her allegedly derogatory writings on Islam.
Maintaining that the government would be able to sustain a growth rate of 9 percent, the prime minister said his government had “unleashed the creative energy of the people and that is what is contributing to the acceleration of economic growth”.
“The gross investment ratio has now touched an all-time peak of almost 36 percent of the gross domestic product (GDP). This represents the underlying dynamism of our economy,” Manmohan Singh said. .
“It also represents a vote of confidence in our policies and in the prospects for India. I am convinced that at current rates of saving and investment, we will sustain close to 9 percent economic growth in the medium range,” he said after releasing the book titled “Business Standard India 2008” brought out by the Business Standard, a business daily.