Thursday, May 31, 2012

Nationwide protests in India over 11 per cent fuel price hike



The strike supported by opposition parties and labor unions resulted in many closed shops and the shutdown of public transportation. Large anti-government marches took place in Mumbai and New Delhi.

In Mumbai there reports of buses being stone and some offices being attacked. Protesters in Kolkata blocked roads while shouting anti-government slogans.

There is growing disappointment about the growth of the Indian economy. The expansion last quarter was the lowest in nine years. However in most developed economies the lower growth rate of 5.3 per cent would be regarded as a stellar performance!

Fuel prices rose by about eleven per cent. However, fuel prices in India were highly subsidized although in 2010 the prices were deregulated. The state owned producers who must import most of their oil raised their prices as the cost of subsidies is increasing debt considerably.

The slowing economy while inflation increase and also corruption within the government is increasing social discontent. The Congress party and its coalition government are facing a decline in support. For more see this article.

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