India’s middle class will perhaps need to adjust their budgets in line with the increased price of petrol as the government tries to cope with the triple challenge of keeping the prices of essentials in check, stablising the falling rupee and arresting a decline in foreign exchange reserves.
The government pays a large amount of subsidy in trying to keep the prices of energy in check, in order to protect its citizens from inflation — although rising energy import bills are eating into India’s foreign currency reserves. Foreign reserves have dropped by $29 billion (Dh106.6 billion) from a record high in September as the central bank bought rupees to stem the 18 per cent slide in the currency over the period. But there have been indications that the government may announce a partial rollback following the public fury.
India is a large consumer of energy and consumption will continue to grow as the economy grows. However, its citizens will have to share the growing pains.
At the same time, opposition parties also should react sensibly. Instead of taking to the streets, they should promote long-term solutions — such as green energy — to reduce India’s dependence on fossil fuels. A general strike would harm the economy.
