A Right Step, Albeit Feeble

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SUMMARY

There is no doubt that a hike in the price of mass consumption products hurt political fortunes; more so in these times of high inflation, for the price hike in the mass transportation fuel, diesel, will only stoke this demon.

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New Delhi, June 26 -- The government's decision to raise kerosene, LPG and diesel prices is a step in the right direction, albeit a feeble one. Even after the hike, oil companies continue to lose a lot of money-estimated at 1.5% of the gross domestic product (GDP). For sure, this prescription needs to be repeated more often and in stronger doses-the prices of the three were last revised over a year ago. There is no doubt that a hike in the price of mass consumption products hurt political fortunes; more so in these times of high inflation, for the price hike in the mass transportation fuel, diesel, will only stoke this demon. This is, no doubt, inevitable.

What is not so inevitable, and a reflection of the government's failings is the amplitude of the political reverberations after the hike- strikes, demonstrations against the hike led by the opposition parties that are seeking a rollback. The answer to this lies in more frequent hikes. For, this will build an appetite in the masses to pay for what they buy. And their decision to vote for a political party will be based on more qualitative issues such as governance and development.

In the last decade, this approach has been practised in the case of diesel for very brief periods...

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