C. Rangarajan, chairman of the Economic Advisory Council to the Prime Minister, on Tuesday favoured decontrolling diesel prices.
Addressing reporters on the sidelines of the platinum jubilee celebrations of the Indian Overseas Bank, Mr. Rangarajan said: “At some convenient point, we should really start the process of deregulation of diesel prices” as they should reflect international crude prices.
Asked about the Index of Industrial Production that had a slower growth rate in the first quarter of this year, he said the IIP figures were expected to pick up later this year. “We expect it will pick up in the second half and reach about 7.5 per cent,” he said.
To a query on whether the Reserve Bank of India would continue to hike the lending rates, Mr. Rangarajan said the RBI strategy would hinge on the behaviour of inflation.
“If that [inflation] does not come down, then the present policy [by the RBI] will continue,” he said.
