April 15, 2012. Former chief economist of the IMF Raghuram Rajan has said the political parties need to bury the hatchet for paving the way for deregulating diesel prices to rein in runaway fiscal deficit and boost the confidence of overseas investors who are a necessity for India. State retailers, who currently sell diesel at a loss of about '16 per litre, are projected to lose a record '208,059 crore in revenues on fuel sales this fiscal and the government has to find ways to meeting this subsidy. The government proposes to bring down the fiscal deficit to 5.1 per cent of the Gross Domestic Product (GDP) in the current fiscal from 5.9 per cent a year ago. Rajan said the freeing of the diesel prices completely should be effected "as soon as possible" and there was a need to raise the prices in commensurate with the international level.