"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