Costly petrol, Inflation and freebies

Shiban Khaibri
The simple logic is that if one cannot afford to buy a thing of use due to high cost factor, either the use thereof should be abandoned or postponed or simply used sparingly or very much economically. That is true of petrol or for that matter for any other thing. If one wants to cross a road, even during non peak hours of the traffic movement, it takes at least three to four minutes, so much is the rush and the turnover of the vehicles of all types – private, commercial heavy, light , two , four and even twelve wheeled heavy vehicles speeding on roads to reach the destinations at the earliest. Why is, therefore, the factor of high costliness of petrol and diesel not being reflected on the roads ?The other way round, just on perusing the sales figures of the petrol and diesel driven vehicles in India during 2020-21 when COVID -19 pandemic wreaked havoc with the economy, though consequent figures showing a dip by 13 per cent, still touched 1.90 crore . Figures of the last three quarters of the year 2021, though not yet published, however, are expected to be quite encouraging as per the trend of sale figures of most popular brands even amidst ”high ” cost of petrol etc.
That, as per the figures available of 2019-20, as many as 271 million non transport vehicles across the country stood registered plus goods and passenger vehicles around 26.5 million speaks about the rhetoric of “Gareebi all around” more as a stereo-type political tool than an economic issue . With third largest road network in the world, India has more than 296 million vehicles . That puts a big question to vehicle owners as to with the individual income levels, does cost of petrol pinch so much that it should become an election issue of most of the opposition political parties with ”promise” to make it cheap – but with applying which type of magical wand is not known.
That means either the issue of petrol is used wittingly, if not that naughtily mischievously just as a trick and as a false promise by the opposition parties to reduce its price if voted to power or there is no serious issue of petrol at all. It is well known that the stuff being imported to the extent of over 85 per cent of our needs has inbuilt cost variations. In other words, crude oil prices have witnessed a global upsurge leading to increase in the prices domestically and thus exerting inflationary pressures. That does not , however, mean that it should not be available at a rate more less than at the present rate but by how much- Rs.5 or so a litre – means just an average monthly saving of Rs.150 slightly less or more . Alternatively, that Rs.150 not saved individually goes to Government coffers to feed millions of needy Indians with a daily two square meal free of cost . The scheme of PMGKAY of free ration to 80 crore people till November 2021 was extended by another four months ending March 2022 . Just for those four months alone, it is going to cost Rs.53000 crore , wherefrom this money will come? We continuously have to strengthen our defence mechanism or yet again for developing critical infrastructure of various hues in the country, paying subsidies of whooping nature to sustain agriculture and expending on various projects across the country , wherefrom the money will come if we do not sacrifice a bit by paying the reasonable tax including through periodically reviewed prices especially of an imported item like petrol etc?
Those who keep crying hoarse about petrol sold costlier by Modi Government have conveniently not reckoned the interest on oil bonds and the principal left un-cleared by the previous UPA Government headed by a renowned Economist. This Government repaid over Rs.2 lakh crore and Rs.70, 000 crore as interest on account of oil bonds which was a loan borrowed by the UPA Government . It may be recalled that the ” highly secular” UPA Government had borrowed Rs.144 lakh crore through purchasing oil bonds to import the crude oil and provide ”cheap” petrol and diesel to the people .These oil bonds were issued by the Congress led UPA Government to oil companies for not increasing retail prices , doing an artificial and cosmetic treatment to the price mechanism, otherwise these bonds were due for redemption starting from this financial year till 2026. Since lot of hullabaloo was created on petrol prices despite the above factors , the Modi Government buckled under mounting pressure reducing the excise duty by Rs.5 on petrol and Rs.10 on diesel per litre starting from around Deepawali festival last year. States , therefore, were compelled to contribute their part of mite – cutting to some extent their share of taxes , the VAT on these two volatile items so that added relief to people could be given.
The ”messiah” and the ”saviour” of the poor as claimed for decades by the Congress cut VAT just by Rs.4 and Rs. 5 on petrol and diesel respectively in its Rajasthan ruled state. Punjab, another Congress ruled state reduced the VAT just by Rs.10 per litre . So , the indescribable and unlimited ”concern” by Congress party for the common man oscillated between Rs.5 to Rs.10 . West Bengal sells petrol at Rs.105 per litre and has refused to slice VAT in any way but since it too is ”highly secular” Government , it probably has asked its people to keep bearing it as an honorarium to them for having ”overwhelmingly” voted it to power for the third consecutive term. However, the ”fascist and divisive” Yogi Government has slashed VAT by Rs.12 in Uttar Pradesh and petrol is sold there at Rs.83 a litre. More on it is not required as these illustrations are symbolic of how each and everything in this country is seen with cheap political prism only and only for votes and grabbing the ”coveted” chair.
Our country is confronting numerous problems, many of which are in disguised form. Unless massive reforms and innovations are pushed in governance, administrative apparatus , taxation, electoral system , agriculture, banking etc etc , we cannot keep pace with the changing times and may remain much behind. It is a travesty that in a country of 135 million , just 1% of people are paying income tax by declaring income above the non-taxable limits or in other words, just 1.46 crore people pay income tax and we want more and more subsidies, jobs, industries, hospitals, schools, free water , free electricity , roads and what not going to the extent of even asking for the moon, day in and day out and blaming Governments in power for not doing enough. It is, however, left to the number of such people who otherwise are liable to pay the tax but ”manage” the other way and to the obsolete system which does not employ ways to widen the scope of taxation , to introspect and keep the country above everything.
Since there are numerous voices, protests and elements sprouting instantaneously against a proposed reform or an amendment to an existing law in the country, how can this country race forward? Taking always the alibi and the cover under decades old oft repeated issues of poverty , massive unemployment , lack of proper education , disturbing the status-quo, democracy and constitutional institutions ”in danger”, sell out to multinationals and capitalists , interference in personal laws etc etc against reforms and innovations was most unfortunate. Various pressures are exerted on the Government to roll back, put in deep freezer, rescind and repeal such laws and reforms which again are bound to hit back only the people of India, the question is, who is bothered?
The political leadership of this country is unparalleled (ly) leading in the world having be-all and end-all of activities confined to elections , starting from one to the other election , winning and losing an election and preparing for the next, right from day one and keeping ”inventing ” and ” hunting” charges, allegations, failures, mismanagement , ”misusing” CBI, ED, ACB, Police etc to ”harass ” and witch hunt the ”honest” opponents – all against any Government in power. Looking to the upcoming assembly elections to Uttar Pradesh, Uttrakhand, Manipur, Punjab, Goa etc, we watch irrelevant and non issues raised . It is a travesty that from nowhere issues are raised or promises made concerning how we could make and build our economy more strong, how our defence system could become strongest, how more economic prosperity and removing disparities would be on top agenda of the next Government, which type of legislation about population control , how more employment opportunities would be generated , how “Rail Roko” and “Sadak Roko” mentality would be converted into “Rail Dodao” and “Sadak Khuli Rakho” etc etc. Added to it is the new political culture spreading menacingly of promising freebies and largesse to buy votes without recalling how, for example , thriving economy of Venezuela collapsed on account of lavish freebies by the Government granted to its people.