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Govt should adopt practice of dual pricing of diesel: CII

25 May 2012 Evaluate

The government should adopt the practice of dual pricing of diesel, says CII. The farm use of the fuel should continue to be subsidized whereas its non-farm use should have a minimum subsidy. Further, the huge subsidy on the price of cooking LPG in the urban areas should be phased out.

The chamber however, is in favour of continuing with kerosene subsidy as it is the poor man’s fuel. CII is also of the opinion that the hike in prices of petrol is steep and is unlikely to resolve the issue of the large subsidy bill. However there is an urgent need to address the issue.

The PHD chamber on the other hand has criticized the hike stating that it is likely to have an inflationary impact on the economy. It has further observed that even though crude oil prices have fallen considerably in the past few weeks, their effect has been nullified with the depreciation in the rupee.

The chamber is also of the opinion that the government should initiate policies that encourage investment and attract foreign capital inflows in the economy. Efforts should also be made to stabilize the falling rupee.

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