The Federation of Karnataka Chambers of Commerce and Industry has slammed the steep increase in diesel, LPG and kerosene prices and said the move would further heighten the inflationary pressure on the economy and people.
“What is worrying is that the current hike comes just a day after India’s food inflation had soared to a 10-week high of 9.13 per cent for the week ended June 11, 2011,” FKCCI said in a statement.
The chamber the increase in fuel prices would have a cascading effect on other sectors.
Diesel, being the fuel for transport sector, would add to the transport cost and hence would lead to further inflation, the FKCCI President, Mr N.S. Srinivas Murthy, said.
The industry body added: “This price hike will push the country’s economy towards crisis. How does the Government expect people to put up with such price hikes every two months?”
This hike, FKCCI felt, would further increase inflation and “it will continue to daunt us and would bother us both at industry as well as domestic level’’.
After showing some signs of easing off in late March 2011, it once again jumped in the first half of April 2011, to touch nine per cent.
“What is more disturbing is the increase in inflation of both food items and manufactured products. In such a scenario, will the Government again opt for the only solution it has i.e. increase the bank rates?” it said.
It is unfortunate that the Government has pared the customs duty on crude by five per cent and diesel by two per litre and says “it is modest and minimal”. It is not understandable why the Government should resist fixing taxes from ad valorem to specific duties, FKCCI said.
The chamber also urged the Karnataka Government to reduce the VAT and entry tax on diesel so that the common man will have some relief.