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| Comments on fuel price hike |
| BS Reporter / New Delhi Jun 26, 2010, 01:30 IST |
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C Rangarajan, Chairman, PM's Economic Advisory Council
"Obviously, the recent fuel price hike will have impact on inflation. Probably, a one per cent increase over a period of time is expected. Some actions are required to tame inflation and RBI will take its monetary stand not only based on the fuel price hike but taking into account the overall scenario."
Adi Godrej, Chairman, Godrej Group
"This will not have much impact (on the FMCG industry). The only impact is that a little bit of freight may go up. On a macroeconomic scale, it is a positive development. It will be good for the Indian fiscal deficit handling also. We have no plans to revise prices. I am confident inflation will come down a lot over the next three months."
Anubhuti Sahay, Economist, Standard Chartered Bank
"It was a difficult decision for the government, more so as inflation is in double digits. It can push headline inflation up in the first round by 138 basis points. Thus, it is bad for inflation. However, from a longer-term perspective, it is a big positive as it is a big relief for fiscal health. We can see a 50-basis points increase in both policy rates."
Nikhil Nanda, Executive Director, Escorts Ltd
"The immediate impact on the industry would be 'not good' because it's a sign that input costs would increase. Whether it's for machinery or the man who is driving a tractor, his cost of operations would go up. There will be an impact in terms of the cost on our manufacturing operations. It's very difficult to give a quantum increase but, yes, there are going to be pressures."
Gaurav Kapur, Senior Economist, Royal Bank of Scotland
"It was an expected move as it was being considered for some time now. Deregulation of petrol and increase in prices of other fuel products is likely to push up headline inflation, help curb government fuel subsidy and rationalise overall consumption of fuel products. Prices of all subsidised fuel products have been increased. The RBI may follow with a rate hike soon."
Sajjid Chinoy, Economist, JPMorgan
"A deregulation of petrol and diesel prices will have both — a one-time direct impact on prices and, more importantly, a second-round impact on subsequent manufacturing inflation as prices in the economy adjust upward. This will contribute to core inflation, which is stubbornly high at the moment, and may remaining that way in the coming quarters."
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