Under fire from UPA allies and opposition parties, Prime Minister Manmohan Singh on Saturday justified hike in diesel price and ushering in new wave of economic reforms.
He said the 12th Plan growth target was lowered to 8.2 per cent from 9 per cent estimated earlier. Manmohan Singh was addressing the meeting of Planning Commission which was called to approve the 12th Five Year Plan document.
"Reforms needed to push economic growth to 8.2% during the 12th Plan period," he said.
Unfazed by large scale protests over diesel price hike, Prime Minister asserted it was a step in the right direction and expressed the hope that economy would rebound in the second half of the current fiscal.
The government had recently increased the price of diesel by Rs 5 a litre and capped the use of subsidised LPG cylinder to six in a year per family, evoking sharp protests all over the country.
The Prime Minister also made a case for comprehensive review of energy policy saying it was vital for energy security of the country. Energy, the PM said, "is a difficult area where policy needs a comprehensive review.''
''We are energy deficient and import dependence is going up. It is vital for our energy security that we increase domestic production and also increase the energy efficiency," he said.
"Rational energy pricing is therefore critical. Our energy prices are out of line with the world prices", he added.
He pointed out a trillion dollar investment was needed to boost infrastructure projects in 12th Plan period.
Outling the broad plan for economic growth in the coming years, Manmohan Singh said short-term problems presented a challenge.
In the present situation, it was a must to revive the investment environment in the country, he said. "The increase in diesel price is an important step in the right direction," he said.
Manmohan Singh pointed out courage and some risks needed to achieve high growth.