NEW DELHI, India, Jan. 9, Reuter; The Indian government increased domestic petroleum prices by 11.8 per cent on Saturday in a bid to cover losses from last year’s crippling drought, Economic Ministry sources said.
India’s budget deficit has increased from 57 billion rupees (4.38 billion dollars) to 77 billion (5.9 billion) because of the drought, they said.
The petroleum increases are expected to yield 3.25 billion rupees (250 million dollars) by the end of the 1988/89 financial year, they said.
With the rise, a liter of petrol will now cost 8/5 rupees (65 cents) in Delhi.
The rise was announced less than two months before the budget and follows increases in government controlled prices of steel, coal, edible oils and sugar.
The government is still assessing the effects of the drought, regarded as India’s worst this century.
The price increases have been criticized by opposition parties, which accuse Prime Minister Rajiv Gandhi’s government of reckless spending.
Article extracted from this publication >> January 15, 1988