Prime Minister Manmohan Singh has strongly indicated that the government is not planning to deregulate diesel prices in the country.

He also said that the government will continue to provide additional diesel subsidy in areas where rain has been less than 50 per cent of average this year. Economists and policymakers has been urging for deregulation of diesel prices in order to avoid losses for state-run oil companies and huge subsidy burden on the government.

It is believed that the a poor monsoon and the fear of political fallout will force the government to delay deregulation for some time. Dr. Singh said that the government is required to control the inflation and this will be a difficult task due to below average monsoon this year.

"However, we have taken many measures to deal with the situation. In districts where there has been a deficit of 50% or more in rainfall, diesel subsidy is being provided to farmers by the government. Seed subsidy has been enhanced," Dr. Singh said.

He pointed out the need for building political consensus in order to implement economic reforms and revive the economic growth in the country.