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De-regulate Diesel Prices: RBI Governer urges Centre

RBI Governor Raghuram Rajan on Monday urged the Centre to completely de-regulate diesel prices in the wake of falling global crude oil prices.
He said, “De-regulation will empower state-owned oil firms to change rates in tandem with crude oil prices like in the case of petrol. In January 2013, the government started a phased de-regulation by allowing up to 50 paise a litre increase in diesel rates every month."
However, as the fall in international oil rates brings domestic diesel retail price at par with cost, the oil ministry has not yet moved Cabinet for deregulation of the nation’s most consumed fuel. It is with the same policy of UPA regime that the NDA government has continued, by rising diesel rates up to 50 paise a litre every month to bridge the gap between cost and retail prices.
Rajan said that the falling inflation is consistent with Reserve Bank of India forecast. In order to make it more transparent, he expressed the need to change the management appointment process in public sector banks.
He pointed out that recent scandals call for better internal evaluation of lending process; banking must become more engaged and informed. During a banking conference, he mentioned that the central bank is in talks with the government to improve governance in public sector banks and said the problems that have emerged in recent bank scandals were due to outsourced project evaluation. He also spoke about ‘Jan Dhan’ scheme, introduced by Prime Minister narendra Modi and said, "It is a good scheme, its target should be universal reach and not speed and numbers."
Rajan also said that India’s macroeconomic indicators are improving and inflation has been coming down consistent with the central bank’s forecast, but Indian economy, which is Asia’s third-largest economy, needs investment growth to pick up.
It is expected to bring down the inflation in the economy, when the diesel price gets cut.

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