Economic and Political Sense prevails!
I appreciate the decision of the Union Government to decontrol petrol prices and hiking other fuel prices. I have read and heard many comments and remarks against this story and hence felt the need to share and discuss it with all of you on the blog.
I do not know whether this decision was selfish or selfless, whatever it was it is in the best interests of the nation.
There is a dialogue by Amitabh Bachchan in the movie Sarkar, "One should be able to foresee a future loss before the present day gains." This situation is similar.
Are we aware of what the Government goes through to provide fuels at subsidised rates? Are we aware that state run Oil Manufacturing Companies are running into severe losses because of the suppression of fuel prices till date? How many of us know that Reliance Industries and Essar had to shut down their retailing stores due to the huge differences in prices between their stores and state run retails? Take a scenario where we are vada pav vendors under government control. The total cost incurred to procure raw materials, cook and serve 1 vada pav is say Rs. 5/- and then the government issues directives where the max selling price be less than Rs. 5/-. So, we are in loss and would eventually shut it down, the only logical option then. How would we feel then? Would not there be resent in our hearts?
How many of us know that the gas supplied to us for cooking is nearly charged 50% (approximately Rs. 300/- which is subject to location and other factors) of its actual price (i.e nearly Rs 600/-)?
Every cylinder we use, 50% is paid by the government which is ridiculous. So at 1 hand at times we spend these exhaustive and dwindling natural resources with a devil may care attitude and complain about the spiraling prices on the other hand, there is no better way to describe it but plain hypocrisy! Even in the case of petrol, which is at the centre of the hike, we have to realize that every commodity is subjected to the laws of supply and demand. Subsidies and regulation of fuel prices was a bane to the economy and the people of the country. A global brent crude price of $74.84/barrel works out to Rs. 21.92/ltr. Taxes and other charges take up the total cost to approximately Rs. 55.88/ltr at consumer end (Mumbai). (155% in taxes including Excise, Customs and VAT among others) The prices still play out less as compared to many other countries. (Global Petrol Comparison) There has been severe criticism regarding the rate hike and not many consumers are open to understanding why it happened. We see the end effect but not the process hence it is important to know the answer to the question - why? I believe blaming the Govt. for the wrong reasons is inappropriate. The partial deregulation of fuel prices is correct (a total deregulation is necessary but the political fall out might be the reason that would have to wait for some time) but as can be seen in the link, the high taxes hurt us. It is the tax policy which is incorrect. Allowing petrol to be free to supply and demand laws is a logical and wise decision in an economic point of view and the next step would be to substantially reduce the heavy tax burden on the consumers, which in all sense, is grossly unfair.
On the bright side, this decision is sure to check the unreasonable use of such fuels. Very few people actually bothered about the fuel crisis due to the low rates, now we will understand the crunch facing us and learn to use every natural resource judiciously. I agree there will be a rise in inflation for the moment due to the increased prices and affect the poorest and middle strata of the society but in the long term it will help the nation with a better utilization of the wealth saved and diverting it to social causes. Also, speaking about the poor and middle strata of society, that is where the value for money is seen more and hence I am sure every citizen would be able to handle this very well and understand the self sacrifice and compromise to be made by all is in the benefit of the nation's economy and growth.
The future shows us of better benefits by sacrificing a temporary gain, and that too a personal one to a great extent. We will save more and profit out of it in the long run. There would be a sort of self control on fuel use and chipping away at unnecessary spendings not only in fuel but elsewhere too.
Cheers to the decision!
Cheers to freedom!
Jai Hind!
I appreciate the decision of the Union Government to decontrol petrol prices and hiking other fuel prices. I have read and heard many comments and remarks against this story and hence felt the need to share and discuss it with all of you on the blog.
I do not know whether this decision was selfish or selfless, whatever it was it is in the best interests of the nation.
There is a dialogue by Amitabh Bachchan in the movie Sarkar, "One should be able to foresee a future loss before the present day gains." This situation is similar.
Are we aware of what the Government goes through to provide fuels at subsidised rates? Are we aware that state run Oil Manufacturing Companies are running into severe losses because of the suppression of fuel prices till date? How many of us know that Reliance Industries and Essar had to shut down their retailing stores due to the huge differences in prices between their stores and state run retails? Take a scenario where we are vada pav vendors under government control. The total cost incurred to procure raw materials, cook and serve 1 vada pav is say Rs. 5/- and then the government issues directives where the max selling price be less than Rs. 5/-. So, we are in loss and would eventually shut it down, the only logical option then. How would we feel then? Would not there be resent in our hearts?
How many of us know that the gas supplied to us for cooking is nearly charged 50% (approximately Rs. 300/- which is subject to location and other factors) of its actual price (i.e nearly Rs 600/-)?
Every cylinder we use, 50% is paid by the government which is ridiculous. So at 1 hand at times we spend these exhaustive and dwindling natural resources with a devil may care attitude and complain about the spiraling prices on the other hand, there is no better way to describe it but plain hypocrisy! Even in the case of petrol, which is at the centre of the hike, we have to realize that every commodity is subjected to the laws of supply and demand. Subsidies and regulation of fuel prices was a bane to the economy and the people of the country. A global brent crude price of $74.84/barrel works out to Rs. 21.92/ltr. Taxes and other charges take up the total cost to approximately Rs. 55.88/ltr at consumer end (Mumbai). (155% in taxes including Excise, Customs and VAT among others) The prices still play out less as compared to many other countries. (Global Petrol Comparison) There has been severe criticism regarding the rate hike and not many consumers are open to understanding why it happened. We see the end effect but not the process hence it is important to know the answer to the question - why? I believe blaming the Govt. for the wrong reasons is inappropriate. The partial deregulation of fuel prices is correct (a total deregulation is necessary but the political fall out might be the reason that would have to wait for some time) but as can be seen in the link, the high taxes hurt us. It is the tax policy which is incorrect. Allowing petrol to be free to supply and demand laws is a logical and wise decision in an economic point of view and the next step would be to substantially reduce the heavy tax burden on the consumers, which in all sense, is grossly unfair.
On the bright side, this decision is sure to check the unreasonable use of such fuels. Very few people actually bothered about the fuel crisis due to the low rates, now we will understand the crunch facing us and learn to use every natural resource judiciously. I agree there will be a rise in inflation for the moment due to the increased prices and affect the poorest and middle strata of the society but in the long term it will help the nation with a better utilization of the wealth saved and diverting it to social causes. Also, speaking about the poor and middle strata of society, that is where the value for money is seen more and hence I am sure every citizen would be able to handle this very well and understand the self sacrifice and compromise to be made by all is in the benefit of the nation's economy and growth.
The future shows us of better benefits by sacrificing a temporary gain, and that too a personal one to a great extent. We will save more and profit out of it in the long run. There would be a sort of self control on fuel use and chipping away at unnecessary spendings not only in fuel but elsewhere too.
Cheers to the decision!
Cheers to freedom!
Jai Hind!
No comments:
Post a Comment