The United Front Government is planning to kick off the process of structural reforms in the hydrocarbon sector by effecting a 12-15 per cent across-the-board increase in the prices of key petroleum products within a fortnight and following it up by a ‘partial’ dismantling of the administered pricing mechanism (APM) in the Budget for 1997-98. Some of the key products that are to be affected by the ‘marginal’ price hike are liquefied petroleum gas (LPG), petrol, high speed diesel (HSD) and aviation turbine fuel (ATF). Kerosene, though highly subsidised as it serves as an all-purpose fuel for the weaker sections, is being left untouched in deference to the concerns of the United Front ‘ constituents.

RBI sees dip in GDP growth to 6.8%

The economy is expected to show a dip in real GDP growth rate by 0.3 per cent at 6.8 per cent in 1996-97 as against 7.1 per cent recorded last year. The current account deficit is also expected to be less than two per cent of the GDP forecast earlier, according to the report on currency and finance released by the Reserve Bank of India (RBI). Slowdown in industrial growth, high interest rates, both nominal and real, and a decline in export growth rate are some of the worrying factors mentioned in the RBI report. “For economic growth to be sustained at a rate of 7 per cent there is an imperative need to raise further the savings rate even though the /latest national income data do show a pick up in the savings rate. A better alignment between desired investment rate and domestic savings rate as well as maintenance of the inflation rate at a reasonably low level will help to bring down the interest rate in a sustained way,” the report says.