Manmohan Singh rules out roll back of petrol prices

Admitting that inflation is a problem, Prime Minister Manmohan Singh on Friday said price rise in food articles in India was, indeed, a problem but said that grain prices have been relatively stable. He also ruled out a roll back in the decision to decontrol petrol prices.

"What prices are going up are prices of vegetables, prices of eggs, prices of fish that is the secondary and tertiary food items. That is a reflection of the demand for these commodities exceeding supplies," the prime minister said.

"That in turn, to some extent at least, is a sign of growing prosperity of our country. If our national income increases by 8 per cent per annum and our population is increasing at 1.6 per cent per annum, the per capita income is growing at 6-6.5 per cent," he said.

"It is bound to lead to a demand for more diversified type of food basket. I am not saying this is a fool proof way of describing this complex reality, but in analysing food inflation, I think, this is an aspect that should not be lost sign of," he said.

Asked about is reaction the protests back home over the recent hike in prices of petrol, the prime minister also said the decision to decontrol these prices was a part of the process to ensure fair play in commodity markets.

"That is the general direction in which we should move. The decision to decontrol petrol prices was part of that process," said the prime minister at the two-Day G20 Summit in Cannes.

"These are very sensitive areas and I have no hesitation in saying that we must allow markets to find their own level, except for those commodities which are in the nature of semi-public goods.

"The direction of decontrolling prices was clear," he said, adding prices of more fuels may also be decontrolled.

The comments come against the backdrop of oil companies hiking petrol prices by Rs 1.80 a litre, effective on Friday. Finance Minister Pranab Mukherjee had already defended the move, even as opposition slammed the government.

With agency inputs