GD Topic: Petrol Price Hike and India's Sovereign Ratings
The steep hike in petrol prices has called for a nation-wide bandh on May 31 by NDA. On Wednesday, oil PSUs had increased the price of petrol by Rs 7.
50 per litre, which has called for a nation wide criticism from opposition, government allies and the commoners.
Congress leader Rashid Alvi said, 'It is a very difficult decision taken by oil companies. The companies are compelled to take such decisions due to a rise in the dollar. The NDA should not misguide the country by going on a strike; they know the situation of the country.'
Indias fiscal deficit broadened to 5.9 per cent of GDP in the year ending in March 2012, much above the governments target of 4.6 per cent. Increase in fuel subsidies, welfare programmes and employment generating schemes have all contributed to the expansion in deficit.
The negative outlook in Indias economy signals a 33 per cent chance that credit rating agency S&P would downgrade Indias sovereign ratings, which might lead to a severe economic crisis in the country.
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