OPINION: Diesel Petrol price rise:

Government lacking shrewdness

There are two types of response on increase in prices of diesel and cooking gas.  The political parties and a common man are saying that this is superfluity and this will affect the masses.  Congress party and almost all economic experts are of the view that this step was necessary and by reducing the burden of subsidy, economy will be benefited. It is possible that the government under pressure of political parties, may take back this step or may put some cut on the increase but at present, it is a courageous step.

The image of India ’s economy is becoming from bad to worse day by day and one the main reason is showing loss in the budget and this time, it is likely to go up by 5.1 per cent of inflation of domestic production.  This loss is because of subsidy on different items on which the centre government is spending about Rs.1,86,000 crore per annum.  On all petroleum products, the subsidy is given and every year the oil consumption is increasing in our country and increase in subsidy bill is obvious.  In the past few days, the prices of oil has increased in the international market and simultaneously, the price of rupee has also gone down with the result the loss on oil account has also increased.

In case the government is adamant on its decision, the saving from diesel and subsidy would be around 15,000 crores and 5,300 crores on cooking gas.  The government has  reduced the excise on petrol to Rs.5.30 per litre but the prices of petrol has not been changed.  In this way, the money will go to the oil companies which will reduce their losses.  The government wants to give a message to industrialists sector also and foreign investors that it is very serious in improving the economy of the country.

In the past, the prices of diesel have not been increased due to some political reasons whereas the prices of petrol were increased with the result the gap of Rs.35 per liter has become between these two products whereas the prices of oil companies are increased for both diesel and petrol.  The situation has come at such a point that to by keeping the fixed diesel rates, it has become difficult to increase the petrol prices.  It is a common assumption that diesel is the fuel of farmers and petrol is of rich people but the factual position is that because of cheap diesel prices, the sale of diesel cars have gone up as compared to cars running with petrol.  The costly cars and SUVs run on diesel but the two wheelers and small car owners have to buy the petrol at high price.  It has to be stopped sometime.

It is a fact that with the high increase in prices, the ultimate sufferer is the common man as the transportation of goods will be increased.  This shock is due to the fact that UPA government had adopted the easy path since long time for not increasing the price of diesel otherwise the people would not have to face such a big hike and economy could have also been better.  The government, in fact, does not take decision in respect of diesel prices for a long time and suddenly announce its decision and where there is strong protest, the government rolls back its decision.

In fact, taking economy decision is a political cleverness and neither this cleverness is seen in the steps taken not the government is able to make understand the people.

The government has to face the music of unwanted step but it is proved that the government is lacking shrewdness on whatever procedure the government has adopted and taken steps.