India's government is facing a backlash from its political allies and the opposition after raising the price of diesel fuel about 12 percent in a bid to reduce the country's rising fiscal deficit.

Prime Minister Manmohan Singh approved an increase of nearly one cent per liter at a cabinet meeting late Thursday. The price of diesel fuel is regulated in India and kept much lower than gasoline prices.

In Mumbai, demonstrators took to the streets Friday to express anger at the move.

A spokesperson for India's ruling Congress Party defended the fuel price increase and said the government was compelled to take such a step.

The government has been under pressure to reduce its deficit by cutting spending for subsidies, including fuel.

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