Diesel Prices Crippling An Ailing Economy: YSRCP

The YSR Congress party on Friday said that the decision of the Government of India to increase the diesel prices by Rs 5 per litre at this point of time is bound to adversely impact the already ailing Indian economy, with the inflation likely to sky-rocket shortly.

In a statement, YSRCP Political Affairs Committee member D A Somayajulu said that the decision to restrict the subsidy on gas cylinders to just six per annum will also financially cripple the middle class and the poor. He argued that the government’s justification that they were compelled to increase the prices because of global price increases was incorrect.

“The main factors responsible for the present state of the Indian economy are policy paralysis and governance paralysis, which have been in evidence during the last four years of UPA Government. The trade deficit of the country has gone up from $20 billions in 2005 to $185 billions in 2012,” he said.

"The current account deficit that deals with foreign exchange has gone up to 4.5% of the GDP as against the current account surplus in 2008. As a result of these mishaps, the rupee has been substantially devalued against the USD, the parity having gone from Rs. 40 per USD in 2009 to Rs. 60 per USD in 2012. Therefore, the landed prices of crude in rupee terms have gone up despite the international prices of petroleum coming down", explained Somayajulu.

He also said that the international prices of petroleum crude were based on daily trading in NYMEX, and that the cost of petroleum crude as on 4-7-2008 was $145 per barrel of 159 litres, further stating that the international prices have since fallen and the cost of one barrel as on 13-9-2012 is $ 97 i.e. $ 48 less per barrel than what it was 4 years ago.

“Because of the reluctance on the part of UPA Government in resolving several key economic issues, the GDP growth rate of the country fell almost to 5%, impacting the revenue growth adversely. The fact that revenue growth in 2011-12 was just 10.66% against previous year’s 25% is clear proof of mismanagement of the economy by the UPA Government. The revenue deficit, which should be zero as per the FRBM Act 2003, is now 4%of the GDP. The fiscal deficit which should be 3% of the GDP is now 6% of the GDP. All these clearly point to the gross inefficiencies of the UPA government. To cover up their failures and non-performance, the UPA government is penalizing the people", he argued.

The YSRCP leader demanded that the diesel price hike be rolled back along with the restriction on subsidized gas cylinders. (INN)