Owing to global economic pressure on the rupee, the government decides to let us have some of it by increasing petrol prices.
The UPA-II, the ‘aam aadmi’ government has just completed its third year in office this May, and what a way to round it off. The last, finishing touch comes as a fine slash of the pen, slitting the throat of the common man clean. At the stroke of the midnight hour, the Indian government dealt its final blow by an all-time, monumental increase in fuel price of Rs 7.50 per litre.
While facing twin deficits and a rupee spinning out of control, the government has more on its plate then it could possibly hope to digest.
The government had earlier in June 2010 deregulated petrol price and kept oil companies in check, warning that there will be no further increase in the run-up to the Assembly elections.
Attributing the steep hike in petrol prices to declining value of rupee, Planning Commission says it will have immediate impact on the price situation, but things will stabilise in the long run since high subsidies have pressurised the country’s current fiscal deficit.
It appears to be a serious step towards fiscal consolidation and managing rising current account deficit of the country. An increase in fuel prices appears necessary to cut down this subsidy payout. The increase was long overdue. But…
The common man, however, will beg to differ.
The rise in fuel prices has engendered a collective national anger, directed towards the government from all parts of the country.
“International markets have cut fuel prices, while under the circumstances of a global slowdown and with much brewing in the debt-stricken European Union, why can’t we reduce subsidy rates, knowing that it’s not affecting to bridge this abyss of our current fiscal deficit?” questions, Afzal Abbas, a businessman in New Delhi.
Finance Minister Pranab Mukherjee blamed global economic uncertainties and a significant increase in oil imports, resulting in a battered and bruised rupee.
Indian Oil, the country’s largest oil firm, said that the company is compelled to increase prices by Rs 6.28 per litre. The figure excludes losses already suffered till date during current financial year 2012-13, which would require an additional increase of around Rs 1.50 per litre in selling price of motor spirit (MS) for balance part of the year.
States most affected include Maharashtra, Karnataka, with Bangalore bearing the brunt of policies enacted by the state government. “In Goa, the state government has done away with VAT, why can’t the government implement a similar structure at the centre?” says Feroz Khan, a berated student, who might not want to touch his bike from today.
The NDA accuses the government of this ‘gift’ bestowed to the poor and the Left have called upon all party units to immediately organise powerful protest actions. “It is a crushing blow on people who are already suffering from severe price rise,” said CPI-M General Secretary Prakash Karat.
“This hike is not going to be the end that justifies all means. Surely, the government had to increase fuel rates, but in the face of international prices cooling down? We have the rupee to blame for losing its sheen,” says Ritesh Allahabadi, a car sales owner. “The government gives a lot of tax rebate to corporate houses, but can it not provide a subsidy on fuel which affects us most?” he asks.
In a curious case of one common man caught completely unaware of fuel price hike, Mr Keshav Saini (name changed) had to abandon ship and make way for public transport. He travels to his office in Noida on his motorcycle which ran out of gas on the highway. Mr. Keshav Saini, dealing in minimum wages, did not have that extra Rs 10 to re-fuel, thinking his extra mileage bike would go all the way, unfortunately, resulting in a bystander eavesdropping on his conversation.
The increase is termed insult —a cruel blow to the common individual, caught off guard, already encumbered by the weight of increasing price of food, commodities, travel and so on.
The common man, who must have slept after a day of toil and labour, would not have imagined in his dreams that tomorrow he would have to think twice to take his old scooter or bike to work. And there goes that great undertaking which he is compelled to undergo every morning — now, his children will have to avail the services of the esteemed DTC to go to school.
Divisive planning and decisive action may quell further unwarranted increase in fuel to get back on the tracks of fiscal consolidation. But, for now, the common man is content with letting off steam.
The UPA-II made sure that we would remember it, and its anniversary, as a government that has done much more for the public — more than we had wanted it to.
First Published: 5/26/2012 10:47:42 PM