Letter to BS: Govt decision to lower fuel prices rightly roils markets

This refers to the editorial “Managed deregulation” (October 9). When crude prices were going down, the benefit was absorbed by the government through hikes in duty because no urgency was felt by the government as the next election was far away. Against the continuously rising price of fuel, the government has reduced the burden of the consumer by Rs 2.50 per litre — that seems a populist action. Without maintaining stability in the value of the currency, the reduction in fuel prices shall further widen the deficit. 

At a time when consumers are losing confidence in the economy as a whole, it is imperative on the part of the government to augment the real income of the wage earners to increase their propensity to consume. Apart from this, the banking regulator must revisit the liquidity position of the economy and the policy rates. The rising fuel price and the falling rupee is jeopardising the interests of the people other than the affluent.

VSK Pillai, Kottayam

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