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The government has taken all the allies on board over the issue and explained to them that the decision to hike fuel prices was taken with an eye on achieving GDP growth and to minimise fiscal deficit
A rollback of the fuel price hike appears remote with the Indian government on Wednesday telling its allies as well as members of the ruling Congress that any reduction would stymie its plans for higher economic growth and lowering fiscal deficit, reports PTI.
In separate meetings with members of parliament (MPs) from the Congress, leaders of United Progressive Alliance (UPA) allies like Trinamool Congress (TMC), Dravida Munnettra Kazhagam (DMK), Nationalist Congress Party (NCP) and Indian Union Muslim League (IUML), finance minister Pranab Mukherjee explained the rationale behind the government's move.
Two of these allies DMK and TMC had earlier resented the government's decision to hike fuel prices but had later piped down their opposition while NCP openly supported the government over the issue.
Mr Mukherjee is learnt to have told the allies that there was nothing in this decision as the government only withdrew (partially) the reduction given in excise duty earlier.
"It was a short meeting. The government explained to them (allies) the rationale behind the decision," parliamentary affairs minister Pawan Kumar Bansal said.
Sources in the government, meanwhile, said that the government has taken all the allies on board over the issue and explained to them that the decision to this effect was taken with an eye on achieving gross domestic product (GDP) growth and to minimise fiscal deficit.
Meanwhile, TMC chief whip Sudip Bandopadhyaye, who attended the meeting, said, "We expressed our observations on the issue. It is now up to prime minister Manmohan Singh to take a final decision. We will accept (the decision). In no circumstances (do) we want to undermine the existence of the UPA."
Sources said Mr Mukherjee in his meeting with Congress MPs told them that steps like the fuel price hike were inevitable if resources are to be mopped up for increased expenditure in the social sector without imposing any new taxes.
Mr Mukherjee is learnt to have told them that since no new taxes have been imposed in the Budget and the government is expecting a GDP growth of 8.5% from 7.2% in the outgoing financial year, some steps were required.
He also gave them a comparative chart of the fuel price hike done under the UPA and the National Democratic Alliance (NDA) respectively in which he explained that the rise in prices of petroleum products was far less during the UPA rule as compared to that of the NDA, which increased prices 33 times.
Mr Mukherjee also allayed apprehensions of any sharp rise in prices of foodgrains and essential commodities due to the fuel price hike telling the allies that the yield in Punjab was good this year and it would help lower prices.
Talking to reporters outside Parliament House, Union minister Ambika Soni, who also attended the meeting, said, "You have to create growth and for growth creation you need to pump in money.”
Another party MP Jagdambika Pal stressed the need for economic reforms to achieve high GDP growth and said, "We will tolerate this burden and price rise will also not be allowed to hit people."
The Congress Core Group had grappled with the issue last night and had apparently decided to back prime minister Manmohan Singh, who has indicated that a rollback would not be possible. Party president Sonia Gandhi is expected to explain the party's position on the issue of rollback when she addresses a Congress Parliamentary Party (CPP) meeting tomorrow.