Fresh cabinet meet on fuel price hikes tomorrow

Finance Minister Pranab Mukherjee will meet ministers on Thursday to fix a date for the next empowered group of ministers (EGoM) meet on freeing fuel prices. The EGoM headed by Mukherjee will meet to consider the Kirit Parikh Committee report, which suggests deregulation of fuel prices.

The earlier meet which took place on Monday failed to arrive at any decision in the absence of key ministers like Sharad Pawar, Kamal Nath, and Mamata Banerjee (See: EGoM defers decision on fuel price hike on absence on key members).

Mukherjee promised a decision on fuel pricing shortly.

After Monday's meeting, EGoM said it needs to discuss the politically-sensitive fuel price issue further. "The possible inflationary effect of fuel price hike was discussed," Mukherjee said.

The revenue loss to the government stands at Rs3.45 lakh crore from FY04-10 due to fuel subsidies, the EGoM stated. This is the second time in a year that the government has tripped on pushing the reform measure that could help trim the budget deficit.

On the economy in general, the minister said the pick-up in exports augurs well. "Our immediate task is to revert to 9 per cent GDP growth. We can maintain 8.5 per cent GDP growth if the monsoon is normal," he said.