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Substantial increase in prices is inevitable — it is high time we honestly reflected on this reality

The past few weeks have seen a lot of dithering on the part of the government about the way the prices of petroleum products should be increased to reflect the consistently increasing international crude oil prices. This discussion reflects poorly on the economic reform programmes of successive governments of India.

The R (Restructuring) Group headed by Dr Vijay Kelkar had submitted its report way back in 1996 suggesting a move towards import parity pricing. Any positive fall out of these recommendations was soon partially rolled back — LPG, kerosene, diesel and petrol were brought back into the realm of control as these were considered to be more socio-economically “sensitive”.

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