India urged to link oil prices to market

NEW DELHI, Jan 5 (AsiaPulse) – The Indian Prime Minister’s
economic advisory panel on Monday suggested that the government
take hard decisions like linking prices of petroleum products
to global rates in 2012-13 as there will be no political
compulsions after Assembly polls in five states are over on
March 3. “I think during the course of next year there may not be any
major electoral compulsions. I think most of the elections will
be over by that time,” Prime Minister’s Economic Advisory
Council (PMEAC) Chairman C Rangarajan said in an interview to
CNBC-TV18.

“Some hard decisions with respect to petroleum subsidies
will have to be taken…,” he said when asked whether the
government can work its way back on to the fiscal consolidation
path.

He said the government faced difficulty in reducing
subsidies on petroleum products and raising prices of diesel
amid high inflation.

“When inflation was running at a level in excess of 9 per
cent for most of the year, it was difficult to adjust the
petroleum subsidies, reduce the petroleum subsidies and raise
the diesel prices, for example. But I think that difficulty
will not be there next year,” Rangarajan said.

Punjab, Uttarakhand, Uttar Pradesh, Goa and Manipur go to
polls between January 30 and March 3.

The PMEAC chief hoped inf