Prime Minister Narendra Modi said the government chose to take on most of a diesel price rise to protect farmers.
He spoke on November 12 at a farm conference in Delhi.
The reason was a sharp jump in crude oil prices. Crude oil is the raw oil that refineries turn into diesel and petrol.
Modi said crude oil rose from USD 70 to USD 122 per barrel within a few weeks. A barrel is a unit used to measure oil.
Key points
- Diesel needed a rise of at least Rs 50 per litre, Modi said.
- The government raised it by only Rs 7 and absorbed Rs 43 per litre.
- The government is absorbing a loss of Rs 14,000 crore every month.
- Free vaccines have reached livestock owned by over eight crore farmers.
So what did the government actually do with diesel prices?
Modi said India needed to raise diesel by at least Rs 50 per litre. Instead, the increase was only Rs 7 per litre.
The government paid the remaining Rs 43 per litre itself. He said this choice was made in the best interest of farmers.
He also said diesel prices rose by 40 to 50 per cent in several neighbouring countries. India avoided a similar jump.
What does this cost the government, and why does it matter to you?
Modi said the government has been absorbing a loss of Rs 14,000 crore every single month since then.
Graphic: News Anek, from the facts in this report
That is a large burden on the public budget.
Diesel powers many farm tractors and pumps. So its price directly affects the cost of farming for you and your family.
What else did the PM announce for farmers?
Modi said free vaccines have been given against Foot and Mouth Disease, or FMD, to livestock owned by over eight crore farmers.
It is a contagious disease in animals.
He also spoke about solar energy. Under the PM-KUSUM scheme, about 12 lakh solar pumps have been distributed, he said.
Farmers can cut electricity bills and earn extra income by installing solar plants on their land.
He urged scientists, engineers and startups to build solar-powered farm machines. He said this could lower farming costs.
