New Delhi : Unlike the hike in passenger fares, the Modi sarkar has not followed the roadmap laid out by the previous government and increased the price of gas.
Rather, a meeting of the cabinet committee on economic affairs on Wednesday deferred a decision for three months. Union law minister Ravi Shankar Prasad, who participated in the deliberations, argued that the new government should be given time to consider the issue.
“The matter needs extensive consultations, keeping public good in mind, with all the stakeholders. The new government must be given time to take a call on what should be the mechanism of review,” he said while responding to a volley of queries at an official media briefing.
His colleague — the minister for oil and petroleum Dharmendra Pradhan who was also at the same briefing — assiduously refused to go beyond the limited opening statement announcing the deferment. He maintained that he had said all that he had to say, and did not answer questions related to the date from which the price hike would be effective or whether the government was in agreement with the Rangarajan formula that had been the basis of the previous government’s decision to notify the new prices.
These questions are in the public domain as Reliance Industries, the main supplier of gas, has initiated arbitration proceedings over the delay in enforcing the new prices after the old agreement expired on March 31, 2014. An increase in gas prices would not only have an inflationary impact, but would also enhance the government’s subsidy bill for fertilizers and power. The government is already fighting with its back to the wall on the question of taming inflation.
Minimum support price is up
Even as the government deferred the gas price hike decision, the Union cabinet accepted all the recommendations of the Commission on Agricultural Costs and Prices and announced an across the board increase of Rs.30 to Rs.50 per quintal in the minimum support prices for various agricultural commodities. “We have provided a big relief to the farmers without adding to the inflationary pressures,” said BJP leader Ravi Shankar Prasad. Prasad also announced that the cabinet had granted an in principle clearance for signing an MOU with the Chinese government for the setting-up of an industrial park. ‘‘As per international protocols, we shall let you know the other details only when the MOU is formally signed,” he added.