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Albatross Round UPA’S Neck!

The Congress-led UPA government does not seem to be learning from its past deeds—eating into the interests of the common man. That is why it is hell-bent on implementing its anti-people’s decisions to raise the price of diesel, to cap the subsidy on cooking gas, and to allow FDI in multi-brand retail. To register their protest, nearly all the major non-Congress parties observed Bharat Bandh on September 20, which obtained above average success across the country. Even the Trinamool Congress withdrew its support to the UPA government at the Centre and other parties are also signalling their unhappiness with the government. Against this backdrop, the Samajwadi Party appears to be rowing two boats. On the one hand, it is lending its support to the government, on the other, it participated overwhelmingly in the Bharat Bandh, and is simultaneously leaving no stone unturned for the creation of the third front! This again corroborates the fact that such political parties only care for their own survival—forget the interests of the common man. Coming back to the real issue, the sudden and shocking price rise is a symbol of an uncontrolled economy. Being protested vehemently across the country, it has shaken the confidence of the people in the government, which is axing its feet with own scythe. If it is so concerned about the loss that state-owned oil companies are incurring due to subsidies being provided on diesel and LPG, it could have opted for some other measure to recover the debt rather than further burdening the common man. Why did it allocate the coal blocks for free whose proper bidding could have garnered lakhs of crores of rupees, which could have been used to bail out the loss of oil companies? It seems that the government is diverting the common man’s attention from the coalgate scam, for which it is burning a hole in his pocket. Any effort for the good of the country is welcome but the rampant corruption of the Congress party makes it impossible for the citizen to trust what the government says. For example, ever since the Bofors scandal, no matter how much the Congress party and its government try in public perception, they have been found guilty—2G, CWG, ISRO imbroglio, black money stashed in Switzerland, coalgate scam, etc. The misuse of CBI to tame Mulayam, Lalu and Mayawati to help this corrupt government survive is another big black blemish on democracy in India. More important, however, is the fact that there are a very large number of countries in the world which manage the price line more effectively; how pray? There is an alternative to honest administration, if one wants the country to make progress!

In fact, petroleum and energy product pricing in India is frequently seen as a black hole of subsidies. Economists and oil companies complain about the impacts those subsidies have on public finances, financial performance of oil companies and demand-side management. However, on closer analysis, the issue of petroleum product pricing in India is more complex than the one-way flow of subsidies reported in the press. So the question to be answered is: How high are subsidies really? Contrary to common perception, India’s retail price for petro-products is relatively high despite subsidies. In fact, the total government (central and states) taxes and surcharges on petrol products exceed by far the annual budget subsidies for these products. There, is thus, a certain rationale for the government to maintain the current system, even though it has negative implications on the financial health of public oil companies and acts as a deterrent to private investments in the sector. In addition, the policy rationale of providing subsidies to allow poorer segments of society access to commercial fuels, cannot be proven conclusively and irrational choices among different fuels are being made due to distorted retail prices. The Indian energy market and the economy as a whole would be better off if the government implemented a consistent, transparent and rational fuel pricing system but with a view to political imperatives, this is unlikely to happen in the short-term. And a hike in prices of petro and energy products would have a ripple effect. No wonder then the common man has been faced with scenario of rising prices of essential commodities for the last several months. And instead of bringing the prices down, this government is adding to the list of commodities that are getting dearer and dearer. The Congress leaders should ask themselves the following questions and find answers for themselves: What is the ideology of our party and do our policies and programmes conform to it? What is our constituency and do we take care of its interests? Who decides on the governance pattern to be adopted by our government or a coalition government led by us, the President of the party or the Prime Minister? Has entrusting the party to a particular family done any good to the party? Is there any harm if the party is democratised? The problems that the party faces today can be solved only if the answers are found to the above questions and the leaders acted on the answers.

Deepak Kumar Rath

Deepak Kumar Rath

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