Hike in the prices of Petrol, LPG & diesel and reactions

At last UPA government has hiked prices of Petrol by Rs 5/litre, diesel by Rs 3/ litre, LPG cylinder by Rs 50. The old adage says that this action is unpopular politically and sensible economically.

CPI-M, BJP and opposition parties have reacted based on old adage and are spewing venom to get electoral mileage.
Reactions from
Advani: ‘Another Act Of Insensitivity And Betrayal’. He concludes that the recent inflation is due to economic management by UPA and doesn’t offer any solutions or alternatives that would prevent UPA government from hiking prices.
URL:http://www.outlookindia.com/full.asp?fodname=20080604&fname=oil+price&sid=2
CPI-M: ‘Thoroughly Unjustified & Unnecessary’ . CPI-M has atleast put forward their unhappiness by listing their alternative solutions to price hike. Read them here
http://www.outlookindia.com/full.asp?fodname=20080604&fname=oil+price&sid=3
However, i like only one of them which says taxing Reliance Industries.
However, what i don’t understand is, why CPI-M didn’t join the government? It can join the government today and force the Congress to fall in line.
Rajiv Pratap Rudy: ‘The UPA government Has Unleashed Economic Terror On The Nation’.
Read here http://www.outlookindia.com/full.asp?fodname=20080604&fname=oil+price&sid=4
This BJP spokesman typical of any BJP personnel has nothing to offer as solutions.

I believe that Congress has done the right thing by hiking the price. Indian citizens needs to understand that one needs to pay the right price for the privilleges that one enjoys. One cannot continue to depend on subsidies for ever.
Subsidies and populist schemes are the main reasons for market failures.
Subsdizing Rice and then paying less for farmers to sustain subsidized rice is point in case. UPA government finally had to shell thousands of crores to write off unpaid loans by farmers.
Instead, if rice was not subsidized, farmrers would have gotten the right price and there ould have been no need for writing off farmer loans.

I don’t think this price hike will result in congress debacle. This will help cut the demand of OIL and road traffic.

Filed under: Finance India, India blogs, Indian Bloggers, BJP, CPI-M, India, Manmohan singh, price hike, UPA