Prime Minister Manmohan Singh on Sunday described the decision to hike petroleum and LPG prices as a 'painful necessity' and said that it had been done, keeping in mind the "totality of circumstances".
Addressing a press conference in Hyderabad on Sunday after inaugurating a national food for work programme in Ranga Reddy district of the state, Singh said that the Left parties had a point of view, but if the government had not taken a decision keeping in mind the hike of crude prices internationally, it would have had disastrous effects on several 'Navratna' public sector oil units.
"The Left parties have a point of view, but if we do not adjust the prices of petroleum products then the profits of oil companies like Oil and Natural Gas Corporation will go down and they won't have enough money to invest in exploration activities. These are 'Navratna' units," he said.
Singh also said that the government could ill afford to absorb the rise in prices as the fiscal deficit of the central and state governments was an area of concern at 10 per cent of the total Gross Domestic Product of the country. "We propose to discuss this issue with the Left parties and tell them that it (the hike) was unavoidable."
On the issue of using the country's burgeoning foreign exchange reserves for investment in public infrastructure related projects, Singh did not specify a time frame as to when a decision would be taken.
"Several technicalities have to be worked out with the Ministry of Finance, Reserve Bank of India and other concerned ministries. A broad based consensus will be evolved on the issue," he said.
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