Pakistan offers India tips on tackling high oil price

June 24th, 2008 - 8:44 pm ICT by IANS  

A file-photo of Benazir Bhutto

New Delhi, June 24 (IANS) Pakistan, struggling with a 12 percent annual inflation rate, Tuesday shared with India the “steps” it has taken to tackle high fuel price, and measures to shield the poor against inflation. “Inflation and rise in oil prices are not India- and Pakistan-centric problem. It is a global phenomenon,” Pakistan’s Planning Commission deputy chairman Salman Faruqui told reporters here after he met his Indian counterpart Montek Singh Ahluwalia.

Faruqui said his government had gone for demand compression and reducing fiscal deficit to 4.8 percent, and had taken several steps to tackle higher oil prices.

On the monetary side, Pakistan has raised interest rates by 150 basis points from 11.5 percent to 12 percent, and the cash reserve requirement was raised to 9 percent from 6 percent.

India, with a 13-year high annual inflation rate at 11.05 percent for the week ended June 7, raised the repo rate or the rate at which the state-run Reserve Bank of India lends money to other banks, by 25 basis points from 7.75 percent to 8 percent.

In order to help people on the margins, Faruqui said his government would soon launch a scheme named after the slain former premier Benazir Bhutto to empower Pakistani women.

Called the Benazir Income Support Card (BISC), every beneficiary (one household) under the scheme would get Rs.1000 a month, apart from employment, skill development, food subsidy and medical insurance.

“The BISC will cover five to seven million poor, and is likely to cover around 20 percent of the country’s population,” Faruqui said, adding that Pakistan had raised minimum wage to Rs.6000 per month from Rs.4000.

A senior Indian Planning Commission official said that Pakistan was considering a proposal to provide fuel subsidised rates to two-wheelers and small cars (with 800 CC engine) owners, while others would have to pay the market price.

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