Chennai: Observing that the country's rising fiscal deficit was due to import of oil products, industry body FICCI on Sunday mooted the idea of decontrolling diesel prices or the government consider imposing higher duty on imported diesel cars.
"Government should now think of decontrolling the price of diesel...", FICCI President Rajya Vardhan Kanoria said.
Kanoria, who will chair the FICCI's National Executive Committee meeting in Chennai on Monday, told reporters that this would be among the 12-point agenda (to stimulate Indian economy's growth) that would be discussed.
Recalling that FICCI welcomed the idea of decontrolling petrol prices as per market conditions, he said, "...if government cannot implement the (decontrolling of diesel prices) measure now, then the government can consider imposing a higher duty on imported diesel cars…".
Chief Economic Adviser Kaushik Basu had also advocated the idea of diesel prices going on a float like petrol.
"I believe petrol should be on a float, the way it is now. And diesel should also go on a float. Float does not mean you raise it, but it means that when the international prices go up, Indian prices also go up somewhat. When global prices drop, Indian prices drop somewhat," he had said.
Kanoria said the idea of the meeting is to "bring investments back on track and to cut government borrowings…"
Stating that the Reserve Bank had to "take a call" on relaxing monetary policy, he said, "... the rising inflation is due to supply side problem and tightening of the monetary policy is not the best way to control it…".
He suggested the idea of removing Multiple Alternate Tax (MAT) as it would stimulate investments in various sectors.
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