Sometimes the government does what it promises. India raised diesel prices by 5 rupees per litre on Thursday in a move guaranteed to alienate the common man, but please foreign investors, oil marketing companies and ratings agencies.
Opposition parties and key government ally Mamata Banerjee expressed their expected disappointment with the decision. The BJP called it a “cruel joke” and “mortal blow,” while West Bengal Chief Minister Banerjee planned a street rally on Saturday and said she was “shocked“.
So… on with the protests and demands to lower the prices. But let’s think for a minute about why that might be the wrong thing to ask for.
Diesel accounts for more than 40 percent of India’s refined fuel consumption, and there is no doubt that this move will hurt farmers, commuters, businesses, inflation and the common man in the near term. But sometimes, governments must make hard decisions that threaten the popularity of its ruling politicians.
The economy is slowing, the fiscal deficit is ballooning and no country wants its debt downgraded. If raising the price of diesel tells the world that India is serious about fixing its economy, rolling back the price would tell everyone that it’s not.



















