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:
  • Most Popular
  • Most Shared

DEFENCE

REUTERS SHOWCASE

Canonisation

Canonisation

Pope declares sainthood of two Indians, four Italians.  Full Article 

Stake Sale Strike

Stake Sale Strike

Coal India trade unions call off strike in victory for Modi.  Full Article 

Markets Weekahead

Markets Weekahead

Ride the bull with a finger on the ejector button.  Full Article 

Arms Purchase

Arms Purchase

India approves $2.6 bln mounted gun purchase - official.  Full Article 

Interview with Bulgari CEO

Interview: Bulgari CEO

Bulgari CEO: we shouldn’t have left India so we’re back  Full Article 

Formula One

Formula One

Hamilton takes second F1 title in style.  Full Article 

Available For Remake

Available For Remake

Bollywood finally wants to pay the price for remakes  Full Article 

Davis Cup

Davis Cup

Vintage Federer seals first Davis Cup for Switzerland.  Full Article 

Movie Review

Movie Review

"Happy Ending" is old wine in an older bottle  Full Article 

Reuters India Mobile

Reuters India Mobile

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