16 Dec : Home Minister P Chidambaram has said that govt may announce further measures to boost growth if required to fight the global economic downturn and hinted on cuts in petrol and diesel prices if the downward slide in international crude prices continues.
"We will keep a careful watch on the situation. If necessary, further measures of stimulating economic growth will be taken," he said replying to supplementaries during Question Hour in Rajya Sabha in New Delhi.
The former Finance Minister, answering questions on behalf of Prime Minister Manmohan Singh who now holds the finance portfolio, said Government’s bias in favour of growth will continue.
While in early part of 2008, the policy bias was towards controlling inflation, the bias today is towards growth, he said while rubbishing theories that India was slipping into recession.
"India is nowhere near recession. We are (only) affected by slowdown in global growth," he said.On the devaluation of rupee against the US dollar, he said Government does not take a view on exchange rate and Reserve Bank of India intervenes in the market only to prevent excessive volatility.
He, however, admitted that the depreciation in rupee had partly offset the benefit of decline in international prices of crude oil and other commodities.
While the benefits of decline in crude oil and commodities were instantly reflected in lower domestic fuel and metal prices, those in foodgrains were not evident as India was not part of international trade.
While the inflation rate has softened with the fall in global crude oil and commodity prices, the same was not entirely reflected in primary article prices.
"Unless production increases, there will be a pressure on prices," Chidambaram said.
While the Government tries to balance between inflation and growth, the bias had shifted towards inflation control in early 2008."Today because of the downward trend of inflation… the bias has shifted in favour of growth."
Government has addressed growth issue by a four per cent across-the-board cut in excise duty and advising banks to lend to borrowers purchasing two and four-wheelers and homes.
Chidambaram said the gap between demand and supply was the core of the problem in pulses.India produced 15.11 million tonnes of pulses in 2007-08 and after accounting for wastage and seeds, the total availability was 12.84 million tonnes.
Against this, the demand was 16.77 million tonnes. "There is a gap of 3-4 million tonnes," he said.
Govt hints at further reduction in fuel prices
"We will watch (crude oil) prices (to see) if further reduction is possible," Home Minister P Chidambaram said replying to supplementaries during the Question Hour in Rajya Sabha on Tuesday.
The Government earlier this month cut petrol price by Rs 5 a litre and diesel by Rs 2 per litre as crude oil prices dipped from an all-time high of USD 147 a barrel in July to under USD 45 a barrel.
Chidambaram said the Government would look into demands for further reduction in auto fuel prices.Even after the price cut, public sector oil firms were making a profit of Rs 9.98 on sale of every litre of petrol and Rs 1.03 per litre on diesel.
The further softening in global oil prices has seen these profits widen to Rs 11.48 per litre on petrol and Rs 2.92 a litre on diesel, officials said.The oil companies, however, continue to lose Rs 17.26 per litre on PDS kerosene and Rs 148.38 per domestic LPG cylinder.
Indian Oil, Bharat Petroleum and Hindustan Petroleum are together projected to lose Rs 111,500 crore in revenues this fiscal on fuel sales, they said.Oil Minister Murli Deora in a separate reply said that 6th December reduction was only an "interim measure".
"Further reduction in the prices of petrol and diesel had not been found feasible (on 6th December) in view of the continuing under-recoveries (losses) on sale of PDS kerosene and domestic LPG," he said.