Need to
rethink and act urgently on fuel prices
SRB
Prices
of petrol and diesel were increased number of times within a year, that too often
steeply. LPG prices were also increased though less often. According to
newspaper reports, the central and some state governments claim that they have
no role in the price hikes. This is one of the blatant examples of deceiving people. In fact, Governments are heartlessly
earning more and more revenue by taxation
at the expense of aam admi. From
the price of each litre sold, a shameless exorbitant profit (about 50%
in some states) is made. Since these hikes in taxation form a percentage of the
price, the profit increases each time fuel prices are hiked. Thus, governments
have not only a role in increasing prices but could have developed a vested
interest in increasing fuel prices. Another basic defect of these
taxes is that they burden both rich and poor alike, both directly and
indirectly by the spiraling cost of everything including essential things
needed by the poor. Lack of an ethics of
care for aam admi is crystal clear
on the part of governments which go
on merrily making profits from sale of fuels while aam admi, have been
forced repeatedly to increasingly struggle against inflation and badly hurting food
inflation, that too continuously for a long time. There are millions of
intelligent people in India. Yet this has been going on unquestioned for many
years.
Central
and state governments are conveniently closing their eyes to the fact
that such taxes are increasingly burdening lower and middle class two wheeler
users (whose number is about five times higher than four wheeler users) and
large number of users of three wheelers (the vehicle for poor and middle class). On the other hand, rich
car owners, corporate bodies and government departments are not seriously
bothered and continue to waste and misuse petrol and diesel despite high
prices. Sad to say, an attitude of
hardened apathy continues to prevail while hypocritically giving lip
sympathy to aam admi and bluffing that governments have no role in
fuel price hike, while making profits
at their expense. They forget that they are servants of the people and continue
to dictate like masters after creating conditions which make most people
spinelss.
In an
article in Deccan Chronicle, Bangalore (30-06-11), Prasenjit Bose has given
detailed calculations of earnings of central and state governments from taxing
fuels and concluded that earnings from petroleum sector is Rs.80,000 crores for
central government and Rs.70,000 crores for state governments, which add up to Rs.1,50,000
crores. These huge amounts are extorted mostly from unwilling but helpless aam admi. According to an article in
DNA, Bangalore (25-06-11), the Central government has eliminated 5% customs
duty on import of crude oil. Government feels that it is being magnanimous. But
this reduction of 5% of their profit is mockingly miserly and callously forgoes
a chance to help aam admi suffering
from general and food inflation, after the strain of inequitable development.
On the other hand, governments could have some justification if these huge
funds were utilized wisely with a long term vision to speedily and
adequately develop alternate energies such as solar and wind power as well as
alternate biological fuels on a large scale on a war footing, instead of nibbling at these without any surge in
emergency.
The
reasons given for this heartless taxation are the need to control budget
deficit and increase in international price of crude oil. The burden of subsidy
is another justification.
With
regard to controlling budget deficit, there are better and more human ways
of reducing deficit which have not received proper attention. Reducing enormous misuse and wastage of
funds which occur in most departments has not received adequate attention. For
example, it is well recognised that only about 15% of huge funds for
projects meant to help rural people reached intended beneficiaries, year after year.
Yet nothing is done to stop the 85%
drain in public money. This is an example of many such landmarks for inefficiency,
grave irregularities and corruption. Another important need is to postpone projects of low priority to better
times. For example, sending Indians to the moon at the cost of increasing
sufferings of aam admi ought to get low
priority till the situation improves. Emoluments of elected representatives
have been increased substantially even though an objective analysis would have
shown their lack of attention to properly carrying out their legislative
functions (often because of sacrificing national interests to party interests).While
aam admi are made to suffer by drastically
increasing fuel prices, budget for the often misused MP Local Area Development
Scheme has been steeply increased from 2 crores to 5 crores for each MP. Many
more examples of misuse, wastage and distorted priority can be found if only governments
care to look for these to reduce budget deficit, with a sense of urgency
for helping suffering people. Lack
of ethics for care of aam admi and innovative
thinking and action are all conspicuous by their absence. Sad to say, lack
of political and administrative will to
give time and attention to such desirable people-friendly actions is evident
and regrettable.
Callousness
has manifested itself even in allocation of work and monitoring. The more
efficient political leaders and bureaucrats are entrusted only with “gainful” departments
dealing with economic matters or power over people, for obvious reasons. Even
worse, while these efficient persons eagerly apply their mind to multiply collection
of funds, they hardly pay any attention to
prevention of misuse and wastage of public money. They merrily continue to
do so. Surprisingly, even the Public Accounts Commirttee of Parliament has
not adequately questioned this serious inactivity leading to huge losses in
public money continuing for many years.. On the other hand, the least efficient
and unwilling are tagged on to tackle social welfare sectors. Even worse, they are
often more interested in manipulating for a change to “gainful” departments.
With
regard to increase in international price of crude oil, there are unanswered questions.
An editorial in Deccan Chronicle, Bangalore (26-06-11) points out that we buy petrol at Rs.70 per
litre as against approximately Rs.45 per litre by people in USA and asks whether
we are paying more for crude oil even though we are closer to Saudi Arabia. It
also asks whether there is a standard cost for conversion of crude into
petroleum products. A white paper
covering all aspects of buying petroleum products and fixing fuel prices is
badly needed to clear all issues. The article by Prasenjit Bose also
supports this urgent need for a white paper, while stating that even at the
prevailing international price of crude oil, “the domestic price of oil would
be less than Rs.30 per litre”. Hence, putting the blame on international price
of oil is diversionary and not justified.
With
regard to subsidy, Prasenjit Bose states as follows while comparing with
Rs.1,50,000 crores revenue from fuel tax: “In contrast, total petroleum subsidy
in 2010-11 was around Rs.38,000 crores (as per the Union Budget). This is to
further come down to around Rs.23,000 crores this year. Clearly, the government
is earning much more in taxes than spending on subsidies in this sector.” In
all fairness, government should not tax
to earn a profit at the expense of
fuel users but restrict the tax
to cover subsidy only. Or, allow oil companies to fix fuel price to include the
subsidy. Either way, fuel prices will come down drastically and help the
suffering people.
Apart
from sheer callousness for the plight of aam
admi, another possible reason may be that government probably feels that
increase in price of petrol and diesel will check increase in their consumption.
But this has not happened. The fact is that these fuels are a necessity for
development and reasonably good quality of life. Neither are these luxury items for the bulk of people and those
engaged in industry, transport, agriculture, health care, education and other
development activities. Wastage and misuse are mostly confined to vehicles used
by officials of government and corporate bodies and rich people who want to
show off their wealth. Increases in prices have not been deterrents for such
people. The Deccan Chronicle editorial (26-06-11) states “despite the
government raising fuel prices there are no signs of a fall in offtake from the
fuel pumps, which shows that there is enough money with certain class to ignore
any hike.”
It is
possible that the latest increase was timed to weaken the demands for a strong
Lokpal bill. Besides serving as a distraction, organizing protests will become
more costly and reduce the number of aam
admi who can afford to protest. If so, such cunning should be defeated by
recognizing that the two are connected. Increase in cost of living results in
higher bribes also. Reluctance to introduce a strong Lokpal bill and reduce
fuel prices are both instances of taking people for a ride for years together
and should be fought together with renewed vigour.
DNA
SUNDAY, Bangalore (26-06-11) stated that on front page: “This steep hike will
pinch household budgets already pummelled by soaring prices of food items and essentials.” In addition, increase in prices also result
in reduced accessibility to health care and education. Though
governments must be aware of these, they have been ignoring these because of
lack an ethics of care for the people. In 2005, Standing
Committee on Energy of Parliament had urged government to reduce its reliance
on petro-taxes. Ignoring this,
revenue from petro-taxes were increased, showing scant respect for Parliament which is
repeatedly stated as supreme (whenever it
suits!). Collection of taxes on fuels should be
stopped immediately to drastically
reduce fuel prices to control both general and food inflation and thereby relieve
burden on aam admi. This will enable
them to eat well, maintain good health, educate their children better and use
transports necessary for their daily use, besides achieving speedier
development of the country.
Let us develop an ethics of
care for the suffering millions
and rethink and act with a
sense of urgency to help them
No comments:
Post a Comment