With just a couple of weeks to go for assembly elections in four key northern Indian States and lok Sabha polls just six months away, the Prime Minister Manmohan Singh appointed-Kirit Parikh Expert Group has suggested some radical measures which are going to be a bitter pill for the UPA to swallow - it has advocated immediate hike of Rs 5 a litre in diesel prices and reduction of subsidised lPG cylinder quota cap to six from the present nine per family annually.
In addition to this the panel also suggested that price of kerosene - the 'aam admi' fuel - should be hiked by Rs 4 a litre and a Rs 250 hike per subsidised lPG cylinder. It further suggested that diesel prices should be deregulated in a year's time. It further recommended fixed subsidy of Rs 6 per litre on diesel.
The panel said that if the Government implements these measures then it would be able to cut its fuel subsidy bill by Rs 72,000 crore. If implemented immediately, the recommendations will help reduce fuel subsidy by Rs 30,250 crore during the reminder period of the current fiscal from a projected Rs 138,435 crore.
Petroleum Minister M Veerappa Moily - who received the Kirit Parikh Expert Group's recommendations, gave a clear indication of the Government's intentions by saying that the suggestions need to be thoroughly examined before they are implemented.