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"There's no easy way out," Malkani said. "India clearly needs a fair amount of luck in terms of oil prices and capital flows." The Reserve Bank of India and the International Monetary Fund, among others, have been urging the government to enact long-promised reforms that would kickstart growth and stimulate investment. A nationwide strike Thursday, organized by opposition political parties to protest a recent hike in gasoline prices underlined the difficulty of economic reform. Economists had cheered the hike as a step toward controlling India's fiscal deficit. The 11 percent increase was the steepest rise in a decade. Opposition parties, however, are demanding that the government roll back the increase to check inflation, dimming hopes that New Delhi will be able to trim other subsidies, such as diesel, which would do far more to balance the budget. In the financial capital Mumbai, residents, especially in the working class suburbs, stayed home, afraid of violence. Many shops were shuttered. Mobs attacked public buses, throwing stones, smashing windscreens and puncturing their tires. Trains, the lifeblood of the city, were unusually empty and Mumbai's normally gridlocked roads were eerily clear during morning rush hour.
[Associated
Press;
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