India should try to completely deregulate diesel prices by the start of financial year 2014-15 as part of a strategy to cut its ballooning fiscal deficit, a government panel report made public on Friday said.

The report, submitted to the government on September 3, before a hike in prices of diesel in mid-September, also recommended increasing the price of fuel by Rs 4 a litre.

Also read: April-June current account deficit at USD 16.4 bn

It also suggested cooking gas prices should be raised by Rs 50 per 14.2 kilogram cylinder.

In mid-September, the government raised diesel prices by Rs 5 per litre, and limited the number of subsidised cooking gas cylinders for each connecton to six in a year.

The panel also said India needed to take "urgent reform" in urea pricing.