Prime Minister Manmohan Singh on Friday told the nation in a televised address that the subsidy on petroleum products was becoming unsustainable.
Explaining the compulsions for increasing the price of diesel and putting the cap on LPG cylinders, he said the subsidy on petroleum products — Rs. 1,40,000 crore last year — was growing: had the government had not acted, it would have become unsustainable, leading to “a further steep rise in prices and a loss of confidence in our economy” among domestic as well as foreign investors, and a spike in unemployment.
Taking a swipe at the wealthy, the Prime Minister pointed out that much of the diesel is used by big cars and SUVs “owned by the rich and by factories and businesses.” Should government run large fiscal deficits to subsidise them, he asked. On the other hand, taxes on petrol were reduced, he said, for “the crores of middle class people who drive scooters and motorcycles.” The decision on LPG was based on a study that “almost half of our people, who need our help the most, actually use only 6 cylinders or less.” Even after the price increase, he pointed out that the prices of diesel and LPG in India, were lower than those in Bangladesh, Nepal, Sri Lanka and Pakistan.
FDI in retail, the Prime Minister explained, would ensure better prices for farmers, and lower prices for consumers. The fear that FDI would hit small traders, he stressed, was unwarranted as “In a growing economy, there is enough space for the big and small to grow.”
Finally, State governments had been allowed to decide whether FDI in retail could come into their States. “But one State should not stop another State from seeking a better life for its farmers, for its youth and for its consumers,” he said.
Keywords: econonic reforms, government subsidies, subsidies withdrawal, Manmohan
Mr.Prime Minister, if you have lost INR 1.4 lac crore due to subsidy then why have you allowed coal blocks worth INR 1.8 lac crore for free to your friends and rivals. Why are you not correcting those anamolies first and putting them behind bars and recovering losses from them? Why are you targetting the subsidies aimed for poor. If you feel SUVs are guzzling diesel then why dont you charge them extra? Why are you not devising ways to segregate people who use diesel for SUVs and who use for shallow pumps in poor villages? Why is Indian Rupee at such low levels? Why has money got concentrated to so few after liberalization of 1991? Dont harp much on reforms and liberalization as otherwise you will find ultra-leftist thoughts amongst city-population too as there are more poor in the country after 1991 than it was before.
Yes Mr. Primeliar, subsidy is unsustainable but Congrees corruption and loot of the country is very sustainable! Brilliant.
Let us hope after raising diesel prices and selling LPG cylinders at the market rate will help the Government in controlling subsidies.
Prime Minister Manmohan Singh’s talk over Government-owned media, though intended to ‘reach out to the people’ is too short of it in time and in content. His appeal ‘please do not be mislead by others’ is returned in the same coin by CPM leader Prakash Karat. Dr.Singh’s only argument is that in 1991, the opposition failed in their ‘tactics’. Actually when he repeats what he did then, that itself is sufficient proof of his own failure. The PM assures that ‘there is enough space for the big and small to grow’. He should have mentioned how much total growth was recorded since 1991, how much is occupied by the ‘big’ and how much by the ‘small’ so that the aam aadmi can respond to his request for ‘trust, understanding and co-operation’. Can he disprove that ‘the rich became richer and the poor became poorer’? While he highlights the Rs.1,40,000 crore subsidy to petroleum products, he, for a minute, did not care about the loss to the State exchequer in the same or higher ranges on account of various scams, black money, foreign bank accounts and other modes of corruption. Had he been able to avoid the corruption, he could have offered greater subsidy to petroleum products now. How can the people accept his generalization that “no government likes to impose burdens on the common man”? When the government issued orders permitting FDI in the midst of nationwide protests, the PM forgot his assurance to the Parliament that he would do so only after a consensus. To say the least, it is painful to hear him, while talking seriously on ways and means ‘to bring the economy back on track’, lamenting that the country has ‘no trees flowering currencies’. It looks like an evasion from one's responsibility. The use of the term ‘trees flowering currencies' appears as if he is disgusted of the people's demands. It can in a way be interpreted as something that shows the speaker's egoism. It was not expected of a man of the PM's status and/or of Dr.Singh's education, experience, humility and age. Only in June last year, he said that his Government possesses no 'magic wand' to eradicate corruption in this country. Administration is no ‘wonderland’ of Alladdin. Incidentally such comments from Dr.Singh also reminds one that he is a Prime Minister only on the mandate of the Constitution, and not on the mandate of the people, since he never faced a general election.
I think if Mr. Manmohan singh is really worried about the economy then
he should take the steps to reduce the corruption in this country. While govt loose millions of rupee due to scams and corruption, he says the subsidies are not sustainable. I think if the govt does the proper steps to recover loss due to the corruption from the corrupted, we will have enough money to save this country from this economic deficiency.
Yes.the following SUBSIDIES are too HUGE.Stop them
1.Stimuli to the rich oligarchs,Indian and Foreign
2.The lie called "under-recoveries' to the OMCs,which is about to touch
rs 2 LAKH CRORES per annum.It is worth noting that this was started ONLY
in 2005 AFTER M M Singh became PM.Before that the OMCs were reporting
PROFIT.
1,40000 crore is nothing .How much did Raja ,kalmadi looted?.How much
did country lost in coal block?.Now PM is asking people to pay for the
money looted by his colleagues.
How much did Congress and its leaders get in all these transaction?
Congratulations and Best Wishes on your mission of reform.Diesel may be supplied at subsidised rate to the essential services for common purpose like PDS.
MMS gave a wrong argument obout the gas cylinders. They have found
about 44% of gas users using only 6 cylinders in a year. That is wrong
because, many of those who have been included in the survey have more
than one connections and the BPL people who have cylinders use Kerosine
obtained from the PDS clandestinely and wood , in addition to the gas.
Obviously, the surveyors have found the number as 6. A household of 2
will use a cylinder for 40-45 days. Which means, 8-9 cylinders in a
year. Hence the government should cancel all multiple connections and
give 9 cylinders per connection per year.Eliminating multiple
connections and eliminating kerosene from those who have a gas
connection along with eliminating fradulant BPL cards), will solve this
problem.
The Prime Minister should not be allowed to get away by making patently wrong statements
like "much of the diesel is used by big cars and SUVs owned by the rich and by factories and
businesses". How about the lakhs of trucks and buses that carry ordinary people and goods
for them. If an opposition leader had made such a statement the media would have laughed
at it.
His argument is ridiculous. He is not talking sense. Much of the
diesel is used by the rich? Completely wrong. What kind of can he
provide validation to his assertion? Just because he is a renowned
economist he can not get away with what ever. He totally wrong about
the FDI and Diesel prices. 90% of the diesel is used for
transportation. Buses, lorries that carry food to places use only
diesel.
He is trying to scare the people and he is using the tactics to
become one with the poor by pointing out that 'those rich people'.
As if he is not rich and the people behind this FDI "scam" are not
rich.
This govt has not done a bit to people. In summary,he needs to step
down. Period. Very ineffective PM.
The speech given by PM was most unconvincing. Looks like some Foreign
powers and Crony capitalists have blackmailed the Govt to force these
reforms On Indians. To bring about real reforms in India, we do not
require FDI. Why is Govt allowing so many car companies in a country
like ours which has so many poor. Why did they not invest in mass
transit and faster trains which could have benefitted everyone and
kept pollution low. Before these reforms, they should have eradicated
crony capitalism and corruption. Also, we have so much labor and raw
materials that we could have constructed rails, roads, Power plants,
water irrigation canals and made country self sufficient in all ways
and created millions of jobs without needing FDI or any support from
World bank or foreign nations whatso ever. These reforms in the long
run will make rich crooks and crony capitalists even more bigger and
poor will get poorer.
Please Email the Editor