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PM sticks to oil price rise
- Left given a leaf out of its own book
India will join an elite club of five when a strategic partnership with the European Union is formalised during visiting Prime Minister Manmohan Singh’s talks with EU leaders on Monday. The US, Canada, Japan, China and Russia are the other countries with which the EU has such a partnership

The Hague, Nov. 7: While ruling out any rollback in petroleum price hike under pressure from the Left parties, Prime Minister Manmohan Singh today sought to play down differences with them, claiming that he did not see the Left 'as a problem'.

Singh described the petroleum price hike as a 'painful decision' while talking to the media on board his special flight to Amsterdam for the Fifth India-European Union Summit. However, he defended the price hike as necessary to safeguard the profitability and competitiveness of the oil sector PSUs.

In balancing the petrol price hike with the need to strengthen the public sector oil companies, Singh sought to hoist the Left with its own petard.

He claimed that by not allowing the state sector oil companies to remain as 'strong profitable entities, we would be harming the cause of the public sector' which embodied the aspirations and desires of the Indian people. 'We cannot kill the hen that lays the golden egg,' he said.

The interest of the poorest sections of society, the Prime Minister claimed, had been kept in mind while hiking the price of petroleum products. 'We have not touched Kerosene prices and only marginally touched LPG prices,' he pointed out.

The Prime Minister claimed that the only alternative to raising prices was to reduce taxes without affecting the profitability of the PSUs. Taxes had already been reduced, Singh said. However, he pointed out that a growth in the fiscal deficit if they are reduced further would put an extra responsibility on the government.

Once again targeting the Left's pet concerns, Singh asked: 'We want to spend a lot more money on education, healthcare, irrigation and agriculture. Where would that money come from if taxes are reduced'

The Prime Minister argued: 'Each time prices rise, we cannot tinker with the budget. We cannot reduce the credibility of our public finances'. At the same time, he pointed out that not increasing petroleum prices would imply 'reducing the competitiveness of these Jewels of India (oil sector PSUs)'.

Singh claimed that the choice of hiking petroleum prices was not an easy one and was, in fact, 'painful'. However, he added: 'I hope that the people of India will realise that we were motivated by a desire to maintain the tempo of social and economic development.'

Singh said that he was 'committed to a dialogue with our coalition partners' and was convinced that differences, if any, could be resolved through that process. 'I do not see our Left colleagues as a problem. I respect their point of view and we will evolve outcomes that are acceptable to our coalition partners,' he said.

The Prime Minister also dwelled on his government's attempts at re-starting a dialogue with political leaders in Kashmir ' especially the All Parties Hurriyat Conference. He denied that his government had delayed the dialogue. 'We were not late (in restarting) the dialogue. A dialogue is not a linear process. There are many ups and owns and many ifs and buts in the process. But the process is on.'

About the new ideas that his government was bringing to bear on the Kashmir issue, Singh would only say: 'The proof of the pudding is in the eating. You will see the outcome.'

The Prime Minister refused to react to Pakistan President Pervez Musharraf's proposal of recognising the 'seven regions' of Kashmir, demilitarising them and then changing their status. 'I had asked him in New York what remained on the table after all the proposals not acceptable to India, Pakistan and the Kashmiri people were removed from it. But we do not have to react to all the off the cuff remarks on the subject,' he said.

If the same proposal came to him formally, what would be India's reaction then' 'We don't react to hypothetical questions. We will cross the bridge when we come to it,' the Prime Minister replied cryptically.

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