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Speedy actions required in diesel decontrol and FDI in retail: Rangarajan

23 Jul 2012 Evaluate

The Prime Minister's Economic Advisory Council chairman, C Rangarajan has urged that quick action has to be taken in diesel prices decontrolling so as to hold the fiscal deficit of the country, which had increased to 5.76% in 2011-12 financial year. Albeit, the government had taken principle decisions to decontrol the price of diesel, it was not implemented fearing the adverse reactions. The decontrol will pass the power of fixing price of diesel from the government to state-owned oil companies.

He also suggested moving ahead with the foreign direct investment (FDI) in multi-brand retail and civil aviation by attaining approval through executive orders without approaching parliament. The government had failed to raise FDI cap in insurance and pension sector to 49%, from 26% and open the multi-brand retail segment to foreign players because of opposition from its coalition partners.

The government has targeted to bring down the fiscal deficit to 5.1% of GDP in the current fiscal, from 5.76% in 2011-12. The high commodity prices in the international market and the inability of the government to adjust domestic prices to global level is putting pressure on the nation’s exchequer.

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