New Delhi: A day after the oil ministry proposal's to restrict petrol pumps timings generated huge criticism from Opposition and public, Oil Minister Veerappa Moily had taken a U-turn within the 24 hours.
The government is in panic mode to cut costs amidst mounting oil imports bills and complaints of oil companies of increasing under recoveries. Though the petrol prices were raised by Rs 2.50 this week, the government feels that this is not enough. However, with the elections round the corner, the hands of the government are tied.
"If this government tries to get this economy back on track, it should call early elections," said TMC leader Derek O Brien.
Experts say there are compelling reasons for a fuel hike. The first big challenge for the government is increasing fiscal deficit and current account deficit and for this the government needs to cut its imports. Slashing oil imports is a way out to do this.
Meanwhile, rupee devaluation and the threat of war in Syria has added to the worry of the government.
The Oil Ministry will be announcing austerity measures on September 16. However, Finance Minster P Chidambaram has cautioned that even this may not be enough. The government needs to send a message to global and home investors that even on its last leg it wants to bring the reforms. And the passage of Pension Bill could be one such message.