Ahead of the meeting of a ministerial panel on fuel prices, Planning Commission deputy chairman Montek Singh Ahluwalia today spoke in favour of a hike in petrol and diesel rates
An empowered group of ministers (EGoM) today failed to arrive at a decision on freeing auto fuel prices from government control, but discussed the possible inflationary impact such a move would have, reports PTI.
Freeing petrol and diesel prices would have meant an up to Rs3.50 a litre hike in rates.
The oil ministry made a presentation to the EGoM, headed by finance minister Pranab Mukherjee, on the recommendations of the Kirit Parikh Committee that suggested freeing fuel prices from government control.
Oil companies have been selling fuel at less than the imported price and as a result suffer huge losses.
It was noted at the meeting that under-recoveries of oil marketing companies on account of current price structure and burden faced the government by way of compensating the companies during the period 2003-04 to 2009-10 was in excess of Rs3.45 lakh crore.
The possible inflationary impact of rise in the prices of petroleum products was also discussed.
Diesel, which is currently sold at a discount of Rs3.49 a litre, is the nation's most consumed fuel that is used in transport sector and hence has inflationary impact.
Overall inflation is currently close to 10% and is mainly driven by high food prices. A rise in fuel prices could fuel it further.
The eGoM came to the conclusion that further discussion would be necessary before views are firmed up.
A further meeting will be scheduled shortly, but no dates were given for the next meeting.
Ahead of the meeting of a ministerial panel on fuel prices, Planning Commission deputy chairman Montek Singh Ahluwalia today spoke in favour of a hike in petrol and diesel rates.
"For six months, I have been saying we should...I haven't changed my mind," Mr Ahluwalia replied, when asked whether this is the right time to increase fuel prices.
Mr Ahluwalia had told PTI in an interview, "India's international economic reputation requires us to say that fuel prices are going to be linked to global prices. I think that linkage (of fuel prices with global prices) is unavoidable."
However, he favoured providing subsidised kerosene to the poor-stressing on the need for exploring the possibility of giving direct subsidy.
State-owned Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum currently lose Rs203 crore per day on selling fuel below the imported cost.
They currently sell petrol at a loss of Rs3.35 a litre, while that for diesel is Rs3.49, Rs18.82 for public distribution scheme (PDS) kerosene and Rs261.90 for every 14.2-kg liquefied petroleum gas (LPG) cylinder.
The Rs15,000-crore fund infusion for tier I capital instruments of PSBs would enable them to expand their credit growth by about Rs1,85,000 crore
As many as seven public sector banks (PSBs) may get additional capital from the government shortly, financial services secretary R Gopalan said in New Delhi today, reports PTI.
The banking division has sought the approval of finance minister Pranab Mukherjee in this regard, Gopalan said, adding, "We are seeking the finance minister's approval...
Five-seven banks are to be recapitalised shortly".
The government plans to provide financial support of Rs15,000 crore to public sector banks during the current fiscal. The Cabinet has already approved a capital infusion plan that will increase the lending capacity of state-run banks by Rs1.85 lakh crore.
The exact amount, the mode of capitalisation and other terms would be decided in consultation with the banks at the time of infusion.
The Rs15,000-crore fund infusion for tier I capital instruments of PSBs would enable them to expand their credit growth by about Rs1,85,000 crore. This additional credit availability is likely to benefit employment-oriented sectors, especially agriculture, micro and small enterprises and entrepreneurs.
Last week, the government infused Rs1,500 crore into four public sector banks-Vijaya Bank, United Bank of India, Uco Bank and Central Bank of India-as part of their recapitalisation package. Of the total, Vijaya Bank got Rs700 crore, Uco Bank got Rs300 crore, Central Bank of India and United Bank of India received Rs250 crore each, sources said.
The letter to this effect was issued by the government on 2nd June.
These banks have been instructed to issue perpetual non-cumulative preference shares (PNCPS) in favour of the president, the recently listed United Bank of India had said in a statement. Accordingly, the bank has issued 25,000 PNCPS of Rs1 lakh each on June 4 in the name of the president, it had added.
The fund infusion will enable these banks to maintain comfortable level of capital to risk-weighted asset ratio for supporting credit requirement of the productive sectors.
Bharat Forge Ltd said it formed a joint venture with KPIT Cummins Infosystems Ltd to manufacture and market an indigenously developed hybrid technology solution for automobiles - Revolo.
This will enable vehicles to increase fuel efficiency and engine performance, while significantly decrease green house gas (GHG) emissions. The technology has been designed and engineered by KPIT Cummins, while the solution for automobiles would be manufactured through a joint venture between Bharat Forge and KPIT Cummins, it said in a regulatory filing.
As part of the joint venture, KPIT Cummins will license the technology, while Bharat Forge would bring in its manufacturing, assembly and integration expertise. Revolo is an indigenous and innovative solution that has been conceptualised, developed and frugally engineered in India.
On Monday, Bharat Forge's shares fell 4.18% to Rs257 and KPIT ended 2.4% down at Rs108 on the Bombay Stock Exchange, while the benchmark Sensex ended 2% down at 16,781 points.