Bihar Inc expresses its discern over the recent fuel price hike

Patna, June 25: The central government’s decision to increase the price of diesel by Rs 3 a litre has come in for sharp criticism from Bihar industry associations and chambers which have said that the decision would have “cascading effect” on the economy as a whole besides adversely affecting the industrialisation process in the state.

The Centre on Friday hiked the price of diesel by Rs 3 a litre, kerosene by Rs 2 a litre and a steep increase of Rs 50 on each liquefied petroleum gas (LPG) cylinder. The hike in prices became effective from Friday midnight.

The industry has been crying foul over the increase in price of the diesel, which is the main input source for transportation of raw material and finished goods, as it has come as a “double blow” within a month. Bihar State Electricity Board (BSEB) had effected an average electricity tariff hike of 19 per cent besides imposing a fuel surcharge of Rs 1.35 per unit for March and April.

The industrialists were critical of the government’s decision and many of them were of the view that the move (price hike) would increase the inflation, which in turn, would hamper the industrial growth momentum in the state.

“The Centre’s decision will have big impact on the industries as on the one hand, the Reserve Bank of India, the central bank, has increased the interest rates for around 10 times in a year to curb credit to choke the general demand and on the other hand, it has increased the price of Rs 3 on diesel which will create inflationary pressure affecting the growth momentum,” Bihar Industries Association (BIA) president Shailendra P Sinha told The Telegraph.

Terming the hike as “unfortunate” and “bad signal” for industrial growth in the state, Sinha said: “The power cost is already high in Bihar. The decision of the state electricity board, which hiked tariff rate and imposed fuel surcharge, has further added to the woes of the state’s traders and industrialists and the yesterday’s hike given them a big blow again. It may squeeze the profit margin of the firms or many industries might go sick in the state.”

Bihar Chamber of Commerce (BCC) president O.P. Sah, who termed the decision as “unfortunate”, said the Centre has taken the decision in haste. Sah told The Telegraph: “It will have an adverse impact on trade and industry. When the prices of crude oil have been witnessing a declining trend in the international market, the Centre should have waited before taking a decision. This single decision will affect everyone, right from the common man to the industrialist. The government should absorb the burden instead of passing it on the general people.”

Confederation of India Industry’s (CII) eastern region vice-chairman and chief executive officer of Shakti Sudha, which processes and markets makhana, Satyajit Singh: “The move to effect a hike diesel price is highly condemnable as it will badly affect the industries and industrialisation process in the state. The reason is that diesel, which the major component for transportation across the country, serves as the lifeline of Indian industries.”

The entrepreneurs are facing the heat in the form of electricity tariff hike and fuel surcharge, Singh said and added that the move is completely negative step as it would hamper the growth.

Industrialist K.P.S. Kesri, director of Amrapali Foods Ltd and ex-president of BIA, was expecting the move anytime given the fact that oil marketing companies were suffering. Kesri, however, said that increase in the cost of electricity coupled with diesel hike has dealt a big jolt to the industries and they might get sick.