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Political Diary
New Delhi, 26 May 2012
Aam Aadmi Be Damned
IS IT PETROL OR
GOLD? BEER CHEAPER
By Poonam I Kaushish
Heard on Twitter: Policemen are jobless because instead of
cheap beer people are getting ‘high’ on costly petrol! This, dear readers sums
up the tragic reality of the aam aadmi
under UPA II. Crippled by soaring vegetable and oil prices, still higher
inflation and now rocketing petrol prices… Mera Bharat Mahan!
Scandalously, the Rs 7.92 increase, record 28th
time, translates into petrol costing over Rs 75.50. In one fell swoop, the
common man has to shell out over 12% more on his daily commute, not to mention
the snowball effect the increase will have on general inflation, higher
transportation, interest rate hike etc. Read, aamdani athanni, kharchaa ruaiya
Predictably, all hell broke loose. Agitatedly remarked Rural
Development Minister Jairam Ramesh, “Rs. 1,90,000 crore is the subsidy on
diesel, kerosene and LPG, and only Rs. 1,00,080 crore for defence and Rs.
99,000 crore for my Ministry. What kind of country is this? Such heavy subsidy
for diesel SUVs? Added a senior Congressman: “We were not informed…most of us
oppose it given its political fallout. Five State Assembly polls are slated
later this year. Surely, this hike could have been imposed with a little more
finesse and subtle handling, done in doses”
Adding to Government woes, troublesome ally Mamata Banerjee
took to the streets against the hike on Saturday. “I demand a roll-back,” she
angrily asserted. In Tamil Nadu Karunanidhi’s DMk too has called a State bandh tomorrow 30 May, followed by
NDA-Left’s the following day.
Post dining on Sonia’s high table to celebrate UPA’s third
anniversary, Samajwadi’s Mulayam too is observing a UP shutdown calling the
Congress a scam-vending machine. Sarcastically bellowed a BJP leader, “Is this
UPA II’s third anniversary gift to the nation?. Why were prices hiked just a
day after Parliament’s Budget session ended?”
Raising a moot point: Will the floundering clueless UPA skid
on the messy oil slick adding to its burgeoning despair? Will its allies and
Opposition get the better of it? Or will Manmohan Singh have the last laugh?
Perhaps it is too early. But one thing is clear. There is
something rotten in the State of Denmark. The issue is not whether some
Congress ruled States like Kerala, Uttarakhand and Delhi decrease VAT from petrol’s over-all
price. What is important is that its allies set the tone and agenda of
governance and it is their pressure that is guiding the Party’s reflexes.
Undeniably, the Government has to rein in the revenue and
fiscal deficit. True, the erosion of oil companies financial position cannot be
allowed to continue indefinitely. The widening deficit in the oil pool account
due to a combination of growth in consumption, subsidy and rupee depreciation
compelled early action. Also it is sound business sense to make the consumer
pay for what he is buying.
Nevertheless, this doesn’t cut ice as it would create fresh
distortions in the economy. Questionably, is soaking the consumer the only stop
way to stop erosion? How will ending the financial year with GDP growth of
7.2-7.5% alleviate the misery of the aam
aadmi?
Importantly, will it put an end to the un-ending free
lunches in Government? Of cost over-runs, increased salaries for a highly
bloated bureaucracy and Ministerial excess baggage. Shockingly, the Central and
State Governments account for 70 per cent of the consumption of petroleum
products. Ministers both at the Centre and States get over six cars each
allotted to them with unlimited petrol.
According to an RTI report, the IT Ministers Messers’ Raja,
Kapil Sibal and Sachin Pilot spent a whopping Rs 53.14 lakh on fuel in two
years 2009-10 and 2010-2011. Followed by Rural Development Minister (Rs 40.70)
Foreign Minister (Rs 37.30) Health Minister Ghulam Nabi Azad who spent Rs 33.60
lakhs and Civil Aviation Minister Rs 22.50 lakhs et al.
This is not all. A Central Minister used to drive to his
residence every time he wanted to go to the toilet as the washroom in his
Ministry was not up to the standard! The MPs and MLAs are not far behind. They
get various Public Sector Undertakings to assign cars to them.
What to speak of babudom.
The Joint Secretary and above at the Centre are entitled to an official car
round the clock. Used to ferry their wives to her kitty
party
and shopping and drop-pick up the children from school. Over 500 kms by just
paying Rs 700 a month! Unlike in the past when even ICS Secretaries used to
drive to work in their personal cars and used official vehicles only for office
work.
Before telling the consumer to curb oil consumption, the
Government should first strictly ration its own consumption. In effect, the
consumer is being made to pay for the folly and reckless populism of the
Government. It needs to answer why kerosene,
LPG and diesel prices have not been increased as recommended by the Sundarajan
Committee report.
According to the Petroleum Planning and Analysis Cell
(PPAC), working under the Ministry, petrol cost’s Rs 44 to oil companies. On
top of which the Government levies Rs.
14.35 paise a litre on petrol — a basic customs duty of Rs. 6.35, a special
additional excise duty of Rs. 6 and an additional excise of Rs. 2. Had the
Finance Ministry agreed to cut even Rs. 5 per litre in excise, it would not
only have given relief to the common man but also prevented the latest hike.
Undeniably, the increase will not only make life difficult
for the vulnerable citizens but also trigger a cost-push spiral. Every one
knows that any attempt to control deficit financing through increase in prices
of petrol prices is at once dangerous and suicidal, both economically and
politically. The Government’s overall oil bill, as also the price of coal,
power and public works will go up. In other words, what they make up in revenue
will be doled out in expenditure.
The price hike would also raise the inflation rate. In real
terms, this means that the purchasing power of the rupee would decrease further,
notwithstanding RBI intervention, and the interest rate would have to be
increased. This would curb growth rate and lead to a fall in the demand for
manufactured goods. All the Government will be doing is changing the gears of
tokenism.
Needless to say UPA II’s economic policies far from addressing
the central problems of inflation, agrarian crisis (agriculture production has
dropped) and rising unemployment are adding new ones for the Indian economy.
Disillusionment and discontent among the people is spiraling. Borne out by
rising farmers’ suicides, chakka jams
and bandhs.
So where does the buck stop? At the neta’s doorstep. Clearly, the fuel price hike is wholly against the
spirit of the Congress commitment, hamara
haath aam aadmi ke saath. The time has come for the Government to stop
making a mickey of the aam aadmi roll-back
petrol rates and work on a war-footing to arrest galloping inflation and
hurtling prices.
Manmohan Singh should remember two homely sayings: Cushions
do not make a bed. And, you cannot go on fooling all the people all the time!
Else, be prepared for the last tango. -----INFA
(Copyright,
India News and Feature Alliance)
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