The only news that seems to emanate from UPA-II is that it can administer shock after shock. The latest is the most unkindest cut of all — the diesel price hike and the cap on LPG cylinders. The Rs.5 hike a litre can affect all of us very badly as this fuel plays a very important role in surface transportation.The cut in cylinder usage is equally bad. The government would do well to conduct a survey of households with LPG and tax households which can well afford other sources of fuel. The government has damaged its image, the perception being that it is corrupt and is just trying to find an escape route by talking about economic growth. Whatever happened to the slogan of aam aadmi?
Who knows if this is just another stunt which will end up in a partial rollback? The aam aadmi faces a bleak future.
In 2010-11, the Centre collected Rs.1,35,433 crore and the State governments another Rs.90,000 crore as taxes from the petroleum sector. A reduction in taxes on petroleum goods will enable oil companies to fully absorb a further rise in the import bill and obviate the need for a fuel price hike. Our petrol bill is getting costlier because of the continuous depreciation of the rupee. In a matter of six months, it has fallen by 25 per cent. The government must introduce wage-freeze and D.A. freeze and nothing should be made free for ministers. One never hears of their experiencing hardship.
A family needs a minimum of nine cylinders per year. Fixing a ceiling will be an additional burden. But efforts must be made to check misuse of domestic gas for commercial purposes.
It has been proved again that fuel is a highly inflammatory issue. Steps like the ones taken by the government will only help the corporates.
Ajin K. Thomas,
The government needs to be congratulated on taking a bold step at a time when its credibility is already at stake because of various scams and the so-called policy paralysis. Diesel accounts for 53 per cent of total subsidies. Also by reducing the excise duty on petrol, the government has narrowed the gap between the prices of petrol and diesel, which is good for economy. This move will certainly contribute to reducing the government’s subsidy burden. This will also send out a message to global investors that India is serious about reforms again. But the way the media and Opposition are projecting this hike makes it seem as if it is a political blunder.
Presently the total subsidies are more than five per cent of the GDP, while the health expenditure is barely one per cent. If we reduce the subsidies and invest this money in our health and education sectors, it will surely enhance the human capital productivity which will go a long way in increasing the per capita income of the people.
Keywords: diesel price hike