Bangalore, June 12 (IANS) The finance ministry's Chief Economic Advisor, Kaushik Basu Tuesday favoured decontrol of diesel price in a small and intelligent way to insulate the country from spiralling global crude prices.
"We cannot decontrol diesel at full swing at this point of time because price jump will be very large. But a controlled intelligent decontrol is possible. I am still hopeful that will happen," Basu told reporters on the margins of a function here.
Asserting that small steps towards decontrol could be taken, Basu said they (steps) would enable people to learn that diesel was a commodity, which at times would be expensive and other times cheaper.
"A price is a signal to millions of consumers that we have a lot less now than we can have. But if we hold diesel price completely and constantly, you are switching off an important signal. People have to realise that if global prices go up and if you shelter them by holding this (decontrol) up constantly, other prices will rise," Basu noted.
Cautioning the people that if global crude prices continue to go up, there would be no scope for shelter, the government's top economist said if diesel becomes expensive, consumers could buy less and when cheaper, they could buy more.
"Once global prices go up, there will be no shelter from holding up the diesel price," Basu said after delivering the Fourth Raj Bhavan Dr V.K.R.V. Rao Memorial Lecture' in the presence of Karnataka Governor H.R. Bhardwaj and a select gathering.