New Delhi, March 3 (IANS) The Communist Party of India-Marxist (CPI-M) Wednesday said the government's refusal to roll back the fuel price hike 'reflects a flawed economic thinking and insensitivity to the sufferings of the people'.

The CPI-M said that while the government hoped to mobilise Rs.25,000-30,000 crore in the coming year by increasing customs and excise duties on diesel and petrol, Finance Minister Pranab Mukherjee had admitted that Rs.26,000 crore worth of revenue would be lost during the same period due to cuts in income taxes.

'How come the prime minister is defending the indirect tax hike in the name of fiscal consolidation while turning a blind eye towards the direct tax cuts?' the party asked in a statement.

The statement asked what 'populist policies' were? 'Having low indirect taxes on fuel, consumed by an overwhelming majority of the people, or doling out corporate tax concessions worth Rs.80,000 crore in one single year (2009-10) in the name of stimulus?'

It said the prime minister's assertion that the impact of the fuel price hike would lead to only 0.4 percent rise in the wholesale price index was a gross miscalculation.

'Food price inflation soared after the last hike in petro prices in July 2009. At a time when the people are reeling under nearly 20 percent food price inflation, this round of fuel price hike will amount to a completely back-breaking burden.

'The CPI-M rejects the prime minister's callous defence of the fuel price hike and strongly reiterates its demand to withdraw the increase in customs and excise duties on diesel and petrol immediately.'