Inter-ministerial panel to recommend partial decontrol of diesel price: Basu

An inter-ministerial group is expected to recommend partial decontrol of diesel prices, Dr Kaushik Basu, chief economic advisor to the finance ministry, said, adding that diesel prices cannot completely be left to market forces as yet.

He said the inter-ministerial group is preparing a roadmap for decontrol of diesel prices and the strategy paper detailing the roadmap is likely to be ready by next week.

Basu, who himself is advocating deregulation of diesel prices, has suggested a partial float on way to full decontrol of diesel prices.

"We feel we should go towards virtually full decontrol. We can't do it at one go; you do want to shelter the consumers as much as possible, but you have to tell people to learn to live with some upward and downward movement in prices," he said on the sideline of an event organised by International Management Institute (IMI).

The inter-ministerial group headed by Basu was originally set up by Prime Minister Manmohan Singh in January last year to look into the inflation situation and recommend remedial steps.

However, the group could not find a solution to the inflationary spiral. Rather, the policy planners are now bent on replenishing government finances and not on reducing expenditure.