Diesel price changes up to government: Chidambaram

HONG KONG Tue Jan 22, 2013 4:01pm IST

Finance Minister Palaniappan Chidambaram attends a news conference in Hong Kong January 22, 2012. REUTERS/Tyrone Siu/Files

Finance Minister Palaniappan Chidambaram attends a news conference in Hong Kong January 22, 2012.

Credit: Reuters/Tyrone Siu/Files

HONG KONG (Reuters) - Changes to diesel prices in India do not need parliamentary support and are viewed as an executive decision because oil companies are owned by the government, Finance Minister P. Chidambaram said on Tuesday.

Chidambaram made the comments at a media briefing after meeting investors in Hong Kong in a drive to try and boost capital flows into Asia's third-largest economy.

The minister also said there was no case whatsoever for any credit rating agencies to downgrade India, as the government scrambles to avoid such a blow to financial markets and investor confidence.

India allowed state fuel retailers to raise prices last week to gradually align them with market rates.

The plan aims to prop up public finances without triggering a popular backlash ahead of 2014 elections as the government struggles to rein in fuel subsidies and hold down its fiscal deficit.

Fitch Ratings earlier this month reiterated its "negative" outlook on India's sovereign credit rating, citing concerns about slowing economic growth, persistent inflationary pressures and an uncertain fiscal outlook.

The comments from Fitch sovereign analyst Art Woo sent the rupee lower, reinforcing worries that India is still at risk of losing its investment-grade rating from the credit agency.

Although Woo described India's fiscal and economic reforms last year as a "step in the right direction," he also expressed concern that the government would miss its fiscal deficit target for the year, while saying the structural reform process was "sluggish."

Fitch and Standard and Poor's last year cut their ratings outlooks for India to "negative", putting India in danger of being the first of the BRICS grouping of fast-growing economies to be downgraded to "junk" status.

(Reporting by Clement Tan; Editing by Kim Coghill)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Earnings Season

REUTERS SHOWCASE

Monsoon Revives

Monsoon Revives

Monsoon revival keeps rain above average   Full Article 

Tackling Food Prices

Tackling Food Prices

India to free up extra 10 million tonne wheat in open market  Full Article 

Just Not Enough

Just Not Enough

Amazon's smartphone fails to kindle a "Fire" among reviewers.  Full Article 

Struggling Economies

Struggling Economies

Asian economies to struggle on weak export demand - Reuters poll  Full Article 

Mining Roadblock

Mining Roadblock

Coal India's plans for 20 mines hit by land, environment delays  Full Article 

Power Jolt

Power Jolt

UAE's TAQA pulls out of India power plant deal with Jaiprakash  Full Article 

Factory Sector

Factory Sector

China July HSBC flash PMI at 18-month high of 52.0   Full Article 

Currency Reserves

Currency Reserves

Sri Lankan, Indian central banks agree scope for government debt buys.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage