Rising Fuel Prices – This is What Narendra Modi Had to Say about It
Petrol and diesel prices continued to rise for tenth day in a row today. Currently, petrol is being sold at Rs 79.31 in Delhi and Rs 86.72 in Mumbai. In Chennai, petrol is priced at Rs 82.41 and in Kolkata it is at Rs 82.22.
The continuous rise in fuel prices has added to people’s woes. While the Opposition is attacking the BJP government over the rise in fuel prices, the government maintains that the rise is temporary.
One of the major reasons for the rise in the price of fuel is the decrease in value of Rupees. Many of the expert economists state the current euro crisis as one of the fundamental reasons of depreciating rupee. But some economist totally denies this fact and questions if this is the real factor behind it then why the other currencies are not suffering and getting affected. If truth were told, Yen has stimulated against Dollar. The other factors responsible for the price hike are fiscal deficit. Fiscal deficit is term used to define the difference in between the revenue and the expenditure. Unbelievably, the financial funding or subsidy offered by the government is the chief reasons for fiscal deficit. At present the scenario is government earning is less than the expenditure. Hence, there is fiscal deficit in the country. The government has tried to restrict the fiscal deficit. It was calculated Rs 5.55 crore in the year 2015-16. Nevertheless, the fiscal deficit is related to trade deficit. It implies the import is more than the export in our country. India majorly imports oil. As the oil is paid for in Dollar, so we need to buy dollar to make payment. Therefore, the currency crisis is also responsible for the price hike. On the other hand, if the government will not raise the price of oil and its product then the country may have to face deficit. With the increase in price, the demand automatically slides down. As a result, the import of oil is less in the country and thus fewer deficits. This effect on fiscal deficit will lead to economic growth.