'Centre should have created fuel price stabilisation fund'

Kolkata: State Finance and Industry minister Amit Mitra on Wednesday questioned the intention of the Central government in not creating a fuel price stabilisation fund to counter the soaring prices of petrol and diesel in the country.

"In July 2014, the crude oil price was 104 USD a barrel. In February 2016, it suffered a huge fall to 33.01 USD a barrel. They could have created an oil price stabilisation fund that could have been used as a buffer stock fund in a juncture where oil prices go up," Mitra said at the Annual General meeting (AGM) of the Bengal Chamber.

The Finance minister further questioned the role of the Centre in not strengthening its fuel reserves with the Indian Strategic Petroleum Reserves Ltd, when crude oil prices fell to 33.01 USD a barrel.

"When oil crunch had hit the US in 1974, it went on to create a strategic petroleum reserve structure of 727 million barrels that can last more than 60 days. But no steps were taken to strengthen the reserves by the Central government," he added.

Expressing his concern over fuel prices climbing everyday and rupee plummeting, Mitra said this is impacting the current account deficit and the Indian economy is hitting 'certain dangerous levels'.

On Tuesday, state Chief Minister Mamata Banerjee had announced that her government will slash the rates of petrol and diesel by one rupee per litre. Talking about the depreciation of rupee, Mitra said it hikes import costs and leads to inflationary pressure.

"We have seen that when there is inflationary pressure, the Reserve Bank of India raises the benchmark interest rate (repo rate). This results in higher EMIs and raises questions about the viability of current projects," Mitra said.

Stressing on exports in the days to come, he said that Bengal's exports was 8.23 billion USD in 2016-17 and in 2017-18 it reached 9.15 billion USD with 11 percent growth in a single year.

"We have to double our exports by 2021 and it can be achieved with the state government coming up with a new export policy and lending constraints being eased to facilitate exports," he added.

Expressing the state's commitment to the development of MSMEs, he urged the chamber to take steps in scaling them up.

The Bengal Chamber at the event signed an MoU with Indo-German Chamber of Commerce (IGCC), for starting a "Centre of Excellence" for MSMEs, to help them identify suitable technology partners from Germany and also facilitate the skill development programme with the help of "Senior Expert Service" programme of German Association of Chambers of Industry and Commerce (DIHK).