The “Editor of the hour” (TV) once asked me a pertinent question. Tell me, he intoned, why should we follow politics? The question was sudden and I blabbered something, incoherent to him and myself.
Later, I found several answers. Not one would suffice on its own. But here is the most important one. We do need to follow politics because it is ruining everything else, social, economical, environmental et al.
Take the case of energy. The Republic’s OMCs are losing to the tune of 450 billion rupees for selling fuels below cost, two-third of which will be compensated by the
The point to remember here, this comes out of mine and your pockets, poor taxpayer sods.
Fine, given the fact that among other things, ours happen to be a socialist, austere(another constitutional amendment anyone? Action sadly missing on this front since Indiramma, tch tch…), LPG and kerosene subsidies would be impossible to be done away with. But Petrol and diesel?
Very recently, in a survey of five poor countries (Bolivia, Ghana, Jordan, Mali and Sri Lanka), the IMF concluded that richer households received a disproportionate share of the benefits from price caps, with the bottom 40% receiving just 15-25% of subsidies. "For every unit of resources transferred to the poorest households, three to five or more units are transferred to better-off households", it says.
"Countries should pass through increases in world oil prices, both to preserve economic efficiency and avoid excessive fiscal costs." That might be politically unpopular, but the issue is "critical, because oil importers are facing greater financing requirements as a result of the negative terms-of-trade shock they are suffering", it goes on to add.
Another pressing argument for the Ministry of Faith, Trust Inc had closed down its 1,400 retail outlets by mid-2008, unable to compete with the state-owned firms' subsidized prices.
In a country where maximum transportation of essential commodities is done by road, the possibility of removing subsidies on diesel can be far mpore catastrophic in terms of burning a hole in the average exchequers pocket. Max diesel consumption in the country is by truck and lorries. An increase in their cost of transportation would lead to the inflated price trickling down to the essential items. We all know what would follow next (remember India is a country where an increase in the price of onions led to the debacle of the incumbent in the Union's capital).
ReplyDeleteSolution: Well maybe a clear distinction between the commercial and personal consumption of disel might help. One would says commercial vehicles include vehicles which do not ferry essential items (cabs, local lorries). The ratio of consumption of diesel by these cars/lorries as compared to the thousands of trucks on a perpetual cross country endeavour is quite small and if allowed o say 'negligible'.