News / Asia

India's Diesel Price Hike Met with Backlash

Indian people pull a car by rope and shout slogans during a protest against the price hike in diesel and capping the number of subsidized cooking gas cylinders in Ahmadabad, India, September 14, 2012.Indian people pull a car by rope and shout slogans during a protest against the price hike in diesel and capping the number of subsidized cooking gas cylinders in Ahmadabad, India, September 14, 2012.
x
Indian people pull a car by rope and shout slogans during a protest against the price hike in diesel and capping the number of subsidized cooking gas cylinders in Ahmadabad, India, September 14, 2012.
Indian people pull a car by rope and shout slogans during a protest against the price hike in diesel and capping the number of subsidized cooking gas cylinders in Ahmadabad, India, September 14, 2012.
Anjana Pasricha
In India, the government is facing strong political opposition to its decision to hike diesel prices, which are heavily subsidized. The increase is being seen as a signal that the government is willing to push through unpopular reforms to jumpstart the country's lagging economy.
 
Protestors led by regional parties hit the streets in several cities including Mumbai and Kolkata on Friday demanding a rollback of the 14 percent hike in diesel prices, which has long been subsidized to benefit the India's transport sector.

The increase, the steepest in several years, is meant to cut the country’s growing budget deficit and reduce the massive losses being incurred by state-run oil companies.

Both allies of the Congress Party-led coalition government and opposition parties say the higher prices will hurt ordinary people, who are already coping with high inflation.

Venkaiah Naidu is a senior leader of the main opposition Bharatiya Janata Party.

Naidu says the hike in diesel prices will have a cascading effect on prices. It will increase prices of travel, bus tickets and food prices. He says they will also hurt farmers who use diesel to pump water for their fields.

However, the government argues that the price increase is inevitable in a country heavily dependant on oil imports.

“We import more than 70 percent [of our] crude oil. Prices of crude oil are going up in the international market. That is the reason the government reluctantly has increased the price of diesel,” said Rashid Alvi, a spokesman for the ruling Congress Party. 

Analysts and economists agree. They have welcomed the price hike, saying it was necessary to plug one of the biggest drains on the government’s finances.  Analysts say the move could ward off the risk of a downgrade in India’s investment rating by credit ratings agencies.   

The hike in diesel prices is just one of several economic reforms that have been stalled for months. The government is also considering opening up the insurance, aviation and retail sectors to foreign investors. But as with the diesel price hike, there is strong political opposition to many of the measures.    

The deputy chairman of India’s Planning Commission, Montek Singh Ahluwalia, says that pressing ahead with reforms is important to accelerate slowing growth.

“I think the diesel price hike yesterday is one of those tough decisions. But we need a lot of tough decisions,” he stated.

Analysts say recent corruption scandals that have hit the government have led to a virtual paralysis in policy-making and further contributed to lagging growth. But they are hoping the diesel price hike is a signal that the government will finally push ahead with some of these reforms.

You May Like

India PM Modi's party distances itself from religious conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote a Hindu-dominant agenda by luring Muslims and Christians to convert to Hinduism More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid