Despite being a cynic, I was one who had always believed that even to the darkest cloud, there would be that wee bit of a silver lining.
For once, am I not right?!
If it wasn't for that hefty and hurried post-election hike of Rs 5 in the price of petrol, how many of us would have bothered to stop and ponder the clever money-making tactics of the corporates and their cronies in the ministry? It is a fact that the slow and steady squeeze was on the consumer and the tax payer for long. Those who have a longish memory will recall the "Gulf war surcharge" that was put on fuel by the government when there was the Kuwait war. The knee-jerk protests of the political parties promptly came in its wake. But when the war ended, nobody, not even the 'watchdog' media, remembered to bark against it.
If you rewind a bit and put two and two together, you could very well see when the price decontrol fever started. The Niira Radia tapes had revealed how ministers like Raja and Deora were put into place by the interested corporates. And everybody who knows our corporates --no need to mention names; they are all the chips of the same old block!! -- knows how they go about getting things done with a large bucket of grease for the palms of the ministry honchos.
The other day I heard our FM Pranab whining that it was all the doing of the oil companies. Poor man, he was trying his best to scare the inflation to go away, and here were these heartless oil chaps playing havoc with his well-laid plans to contain inflation and make this India a heaven for the 'aam aadmi'. The FM and the PM (himself a financial wiz!) sadly seem not have noticed that the increase in fuel prices are likely to affect anything and everything, either directly or indirectly. You cant fault them; while studying the economic impact of such measures in minute detail, it may not be possible to notice such 'affects' that might immediately occur to the 'common sense' of the common man in the street.
All I wish to say about it is, with their demonstrated 'acumen' in economics and planning, these guys won't make the grade even if the corner paanshop was recruiting somebody to mind its accounts. Ah, perhaps "scientific economics" was somewhat counter-intuitive! How these guys are continuing to formulate this great Nation's economic 'policies' is a mystery to me. Dont we have some guys who understand "straightforward economics" in this country?
We think these guys are idiots who do not understand profit and loss and inflation and such stuff. But, NO!! On second thoughts, I dare say they ARE intelligent beyond measure; the problem is that we are not wired to see their reasons and reasoning, and their formulae with "secret ingredients" that make them do what we ultimately think is a foolish approach that compounds the problem. A look at a few things that have blended into the background will reveal their very clear thinking and their purpose.
The other day I received an SMS. This is what it said:
Petrol (per litre) prices in:
Pakistan - Rs 26
Bangladesh - Rs 22
Nepal - Rs 34
Burma - Rs 30
Afghanistan - Rs 36
India - Rs 67
-------------------------------------------------
Basic cost - Rs 16.50
Central taxes - Rs 11.80
Excise duty - Rs 9.75
State tax - Rs 8.00
Vat/cess - Rs 4.00
Total - Rs 50.05
-------------------------------------------------
Simple arithmetic (easy! we can work it out ourselves; this is not running into lakh-crores to boggle our minds!) tells us that the cumulative taxes work out to more than TWICE the basic price of the stuff. And as the taxes are computed as a percentage of the price, every time the price goes up, the "cut" of the government too goes up! No wonder like brothers in thievery, there is this unbeatable nexus of the cronies! I haven't bothered to check the comparative pricing in the neighbouring countries. You could do that if you have some contacts here and there. But you dont need to do any comparative study to see that this is a grand rip-off.
I phoned up a couple of friends in the industry and they confirmed most of our worst fears about pricing, about the interntional fuel trading sharp practices, futures trading etc. But ther is really no need for us to go into all that, or understand all that, in order to question the logic of our ministers and their minions when it comes to "policies" on fuel pricing.
There are other little-heard stories to fuel pricing that will take us first to the high altifude games in the aviation fuel sector.
At a time when the "aam aadmi" was charged Rs 60 plus for a litre of the kerosene-laced stuff called petrol all over India, jet fuel was going for less than Rs 45 a litre! By now the country is privy to the heavy and continued losses that Air India have been incurring and how it was the need of the hour to "get rid of it" to save the national waste etc etc. In a magnanimous last-ditch gesture to save the national carrier from its loss trap, the government, in 2008, wrote-off the excise and customs duties on aviation fuel. What a patriotic and timely action, we all thought! However, not only did Air India fail to get out of the red, but they drove the staff into another wave of strikes, pushing the airline into a deeper abyss of loss and debt.
But Air India's loss was the gain of the other airlines--all private players and "cronies" of the government. How? When the government so charitably wrote-off the duties, it was not for Air India alone, or for a limited period. With a fell stroke of the pen, they just abolished the duties on aviation fuel! And all the private airlines were(are still!) flying about on the cheaper fuel and raking in hefty profits --putting the entire subsidy burden indirectly on the poor man in the street who pays dearly! What a Robin Hood-ian technique of robbing poor Peter to pay Paul a grand subsidy!
For the sake of a record here are the prices as on 17th May, 2011:
Petrol - $ 128 / barrel
Aviation fuel - $ 135/ barrel
This is what ultimately translates as Rs 67 for the man in the street and less than Rs 50 for the "high-flyers"! Surely airline companies too, like 'good' businessmen the world over, are willing to "kick back" a percentage of the profits that they make as a result of this largesse at the expense of the tax payer.
Do you still think that our ministers are embodiments of stupidity and they dont understand economics? The laugh, dear reader, is on you ...
If you think that the 'subsidy game' is limited to aviation fuel, think again. Diesel right now happens to enjoy subsidies along with kerosene and cooking gas. When we think of diesel, the common man naturally thinks of the railways, the backbone of the nation, and of the road transportation network, the life-line of the country.
But no, there is another large group of diesel consumers who are quietly consuming all that they can without getting into any loud controversies and without rocking the boat. No prizes for guessing who this new breed is, though I am sure you may not come anywhere near the truth with your guesses. They are the mobile companies. Mobiles ran on 2G or 3G, we all thought. No sir, all their towers run on diesel gensets, and with electricity "service" being what it is in our country, you could imagine the huge quantum of diesel that would be needed to keep the networks alive.
Greenpeace, the environmental NGO, has estimated that the exchequer loses a whopping Rs 2,600 crore annually as a result of the 'subsidy' enjoyed by the mobile companies. (http://www.greenpeace.org/india/Global/india/docs/cool-it/reports/telecom-report-may-2011-web-optimized.pdf ) And are we naive enough to believe that the government is ignorant of all these goings on in the country? If they really are, then it is best that we are rid of such a body of worthies called a government--ASAP!
Add to this the growing trend of "portable power". Thesea are huge diesel gensets mounted on trucks that could be hired and deployed at the point of use. Apparently no rules of noise or other pollution apply to these "portable polluters". If you look around you could see them chugging away from morning till evening, and sometimes through the night, making money for the owners...and all powered by the subsidized diesel! Nobody has as yet done a study on these millions of power units that daily consume millions of liters of diesel; but the figures are likely to be equally mind-boggling as are the mobile tower ones.
And what are subsidies? It is nothing but the common man's tax money, and not anybody's dowry!
Think of the heavy CO2, smoke and noise pollution created by all these millions of heavy gensets and how the carbon footprint is going to be made larger as a result. We have rules to harrass the poor 2-wheeler rider on the strength of the various stages of the Bharat pollution laws. But when the railways or the buses and trucks on the roads, or now these millions of diesel gensets, spew out tons and tons of pollution into the atmosphere, our lawmakers conveniently look the other way.
Now to come to the point as regards fuel pricing, if we are to decontrol prices, let us decontrol fully, and we will pay the international prices. Let the government get out of the equation and give up their "cut" of the taxes, except perhaps a small import tax. Let there be the a rationing of the stuff with a minimum quantity offered at a controlled price. (The government have always decried rationing, arguing that it will bring in black-marketing; but it is the job of the government to see that black-marketers are in prison... or, maybe in the ministry, but certainly not out in the streets!)
There has to be a dual pricing for fuel, particularly diesel, so that the core sectors get diesel at a fair price that will hold inflation in check, and the profit-making private players like mobile tower operators and portable power salesmen will have to pay a higher price, and not ride along happily at the cost of the tax payers of this land.
It is high time the "free market" pricing for fuel was abolished and government controls reinstated on a critical input like fuel. That, whatever our pundits will say, is the only way inflation can be checked and development ushered in this country.The government have to see that there is more transparency about the domestic oil production and how it is tied into the system as regards pricing. If the planners and ministers do not claim to understand such simple and straightforward logic, then they could very well quit and take up profitable employment with those companies whose writ they run now. No sir, the people wont pay you good money to do such disservice as you do now to the nation.
The writing is on the wall; if you can read, well and good. Before the entire nation rises in anger in a fiery revolt, it would be in your own interests to put the record straight in a hurry and price aviation fuel, diesel, petrol, cooking gas, kerosene etc in a rational manner --and NOT according to the whims of your cronies in corporatedom. Such a step might just pour some oil on the troubled waters.
Otherwise it could well be a lot of trouble on exremely oily waters that wouldn't be easy to navigate..... or survive!
The choice, sir, is yours to make !
* * * * * * * * * * * *
Friday, May 20, 2011
Sunday, May 15, 2011
ADDING FIRE TO THE FUEL ISSUE
Long have the government and the oil companies been playing a hide-and-seek game and avoiding core issues and inconvenient (for them!) questions. It is time we added some fire to the fuel issues so that out of the conflagration the truth would emerge.
This nation was not conceptualized as a market economy where the vagaries of the market forces would determine its direction and fate. Such was NOT the idea of the Founding Fathers and Planners of this great nation, who wanted to give shape to a welfare state where the needs of the citizenry guided its policies and actions. The core systems of this nation were planned and implemented not as profit-and-loss enterprises, but as mechanisms to realize certain needs and meet certain aims, and to contribute to the stable working of this democratic nation. PM Singh and his 'liberalization' brigade are welcome to go to the founding principles of this nation if they wish to update themselves. It is evident that these worthies do not understand, nor care for, stable social systems as mediated by a people-oriented government.
In this context, does the government believe that stability in the fuel sector is key to national developement? And how are they proposing to achieve that in the face of a fickle oil market? For them the best option is to leave the people and the nation at the mercy of the market forces and let them fend for themselves. At the very same moment they are not foregoing the additional monies that accrue to them by way of taxes whenever a price hike is implemented--and that too without any "sweat"! This is something akin to running with the hare and hunting with the hounds!
The Indian taxpayer has made substantial investments in oil exploration and refining and related infrastructure. The Indian refining and processing costs are some of the lowest in the world. What about the Indian crude production? What percentage of the domestic needs could be met by that alone?
Another little publicized fact is that the Indian oil companies process the imported crude into various value-added products and re-export a huge quantity of that, earning sizeable profits. There is no separate import of crude for this; it is clubbed with the total import, and the whole burden is put on the shoulders of the consumer in the street. This has to be stopped.
There is widespread feeling that the government is a willing dancer to the avaricious piping of the oil companies when it comes to the "loss assessment" and the periodic arbitrary hikes in fuel prices. Internationally crude prices rise and fall, but in India the fuel price has only one way to go--UP! Maybe this is the 'progress' that they have in the 'progressive alliance' that is the government...
It is time we got clear answers to at least a dozen questions.
A DOZEN QUESTIONS TO THE GOVERNMENT
1. What was the total quantum of domestic crude production in 2010-11? And its total pricing?
2. What is the final sale price per litre of domestically refined fuel, including nominal profits? (Transportation costs can be considered separately, as it is done now.)
3. What percentage of domestic consumption could be met by processing the domestic crude?
4. What was the quantum of crude imports for the previous year ? Its total cost ?
5. What was the processing cost in the Indian refineries? (As the infrastructural investments in refineries etc have already been made by the taxpayer, that need not be factored in; rather, what are the actual refining/processing costs?)
6. Considering the above (# 4 & 5), and adding a nominal profit, what is the recommended retail price of a litre of the 'imported' fuel? Is it cheaper or costlier than the domestic processed fuel, and by how much?
7. What is the total quantum/value of re-exports of petro products made by the oil companies in the same period as above?
8. Have the above value-added petro products been manufactured from crude imported separately or from the total quantum of imports for the year?
9. What is the profit that has accrued to the oil companies from the above (# 7) export transaction?
10. What are the Central taxes/State taxes respectively on a litre of fuel?
11. What was the tax amount that accrued to the government each time as a result of the last three price hikes? What percentage of the taxes are ploughed back into oil-related fields?
12. What was the total subsidies that were given to the oil companies? On what basis was it computed?
As we all know, these are all 'inconvenient' questions for the "powers that be". Vague statements and obfuscation have been the characteristics of "official speak" in this connection till now.
It is high time a strong mechanism for the rationalization of fuel price (one nation, one price--why Delhi should have the lowest price?) and its maintenance at a stable level has to be evolved as a national priority. Frittering away the precious results of the sizeable investments made of the tax payer's money in building the temples of progress of this nation, sadly, is the unsustainable economic mantra of Singh and his cohorts.
NOBODY has the right to sell off what he has not built or what he doesn't own!
This mindlessness has to be stopped--NOW!
* * * * * * * * * * * *
This nation was not conceptualized as a market economy where the vagaries of the market forces would determine its direction and fate. Such was NOT the idea of the Founding Fathers and Planners of this great nation, who wanted to give shape to a welfare state where the needs of the citizenry guided its policies and actions. The core systems of this nation were planned and implemented not as profit-and-loss enterprises, but as mechanisms to realize certain needs and meet certain aims, and to contribute to the stable working of this democratic nation. PM Singh and his 'liberalization' brigade are welcome to go to the founding principles of this nation if they wish to update themselves. It is evident that these worthies do not understand, nor care for, stable social systems as mediated by a people-oriented government.
In this context, does the government believe that stability in the fuel sector is key to national developement? And how are they proposing to achieve that in the face of a fickle oil market? For them the best option is to leave the people and the nation at the mercy of the market forces and let them fend for themselves. At the very same moment they are not foregoing the additional monies that accrue to them by way of taxes whenever a price hike is implemented--and that too without any "sweat"! This is something akin to running with the hare and hunting with the hounds!
The Indian taxpayer has made substantial investments in oil exploration and refining and related infrastructure. The Indian refining and processing costs are some of the lowest in the world. What about the Indian crude production? What percentage of the domestic needs could be met by that alone?
Another little publicized fact is that the Indian oil companies process the imported crude into various value-added products and re-export a huge quantity of that, earning sizeable profits. There is no separate import of crude for this; it is clubbed with the total import, and the whole burden is put on the shoulders of the consumer in the street. This has to be stopped.
There is widespread feeling that the government is a willing dancer to the avaricious piping of the oil companies when it comes to the "loss assessment" and the periodic arbitrary hikes in fuel prices. Internationally crude prices rise and fall, but in India the fuel price has only one way to go--UP! Maybe this is the 'progress' that they have in the 'progressive alliance' that is the government...
It is time we got clear answers to at least a dozen questions.
A DOZEN QUESTIONS TO THE GOVERNMENT
1. What was the total quantum of domestic crude production in 2010-11? And its total pricing?
2. What is the final sale price per litre of domestically refined fuel, including nominal profits? (Transportation costs can be considered separately, as it is done now.)
3. What percentage of domestic consumption could be met by processing the domestic crude?
4. What was the quantum of crude imports for the previous year ? Its total cost ?
5. What was the processing cost in the Indian refineries? (As the infrastructural investments in refineries etc have already been made by the taxpayer, that need not be factored in; rather, what are the actual refining/processing costs?)
6. Considering the above (# 4 & 5), and adding a nominal profit, what is the recommended retail price of a litre of the 'imported' fuel? Is it cheaper or costlier than the domestic processed fuel, and by how much?
7. What is the total quantum/value of re-exports of petro products made by the oil companies in the same period as above?
8. Have the above value-added petro products been manufactured from crude imported separately or from the total quantum of imports for the year?
9. What is the profit that has accrued to the oil companies from the above (# 7) export transaction?
10. What are the Central taxes/State taxes respectively on a litre of fuel?
11. What was the tax amount that accrued to the government each time as a result of the last three price hikes? What percentage of the taxes are ploughed back into oil-related fields?
12. What was the total subsidies that were given to the oil companies? On what basis was it computed?
As we all know, these are all 'inconvenient' questions for the "powers that be". Vague statements and obfuscation have been the characteristics of "official speak" in this connection till now.
It is high time a strong mechanism for the rationalization of fuel price (one nation, one price--why Delhi should have the lowest price?) and its maintenance at a stable level has to be evolved as a national priority. Frittering away the precious results of the sizeable investments made of the tax payer's money in building the temples of progress of this nation, sadly, is the unsustainable economic mantra of Singh and his cohorts.
NOBODY has the right to sell off what he has not built or what he doesn't own!
This mindlessness has to be stopped--NOW!
* * * * * * * * * * * *
WHOSE MONEY IS IT ANYWAY ???
Over the past many weeks, our little group had busied itself mainly with just a couple of questions.
Do we need politics, and do we need a government of the kind we have now.
For our close-knit group, mostly of men, living within our limited means was the only way, whether we were retired or about to retire, employees or honest businessmen (yes, such a tribe do exist in this Mahan Bharat, now better known for its predatory corporates and their cronies for whom dishonesty is the key to success! ) or entrepreneurs. Inflation was very real for us as it squeezed our lives for no fault of ours, and it wouldn't go away despite the admonitions of stalwarts like Pranab Mukherjee or even PM Singh. Nations can easily go into what they term a deficit budget and spend much more than they have. Unfortunately such fiscal magic does not come to bail out the poor man trying to make both ends meet in these hyper-inflationary times.
The above serious questions were triggered mostly by the changing "colour" of recent politics. Gandhiji, as most of us agreed, was perhaps the greatest of politicians. But his type is an extinct breed even in his Congress party, though they took care to wear 'khadi' and the 'Gandhi cap' till recently. Not any longer. In these enlightened and modern times of 'gen text' and social media, khadi has gone God alone knows where. And if anybody wants to have a look at the 'Gandhi cap', s/he could go to Jantar Mantar or wherever else Anna Hazare is --he wears one proudly; and by God, it does suit him! Perhaps it is good that Congress has jettisoned both Gandhi and his cap and khadi at one stroke. But we are likely to agree that politics of the right kind is the fuel that powers any healthy democratic society. But the trouble with today's politics is that it is one hundred per cent party politics --and if you are not a party maniac, there is pretty little for you there.
Now how about governance? Those that are old and experienced will surely know that orderly governance rather than unfettered anarchy is what gives a well-rounded fullness to life. Now what all areas do we need to be governed in as a people? First and foremost, law and order in society; then a happy compromise has to be maintained between the conflicting interests of the billion citizens of this nation, and that calls for some policies that are acceptable to most and that will guarantee the welfare of virtually all. Healthcare and social security/welfare also call for a strong framework of governance. Regulating the economic mechanisms of a teeming nation surely needs perspicacious governance. And, looking outwards, taking care of ourselves and proactively interfacing with the alien nations of today's shrinking world requires great acumen in governance. A closer look would reveal that every collective human activity in society and a nation demands policies of governance which shall put the collective needs and aspirations of its people uppermost.
When you start thinking like that, do we dare to call the bunch of dissembling, opportunistic, arrogant, profiteers manning the machinery of government at the current moment a government? There is likely to be agreement that there need be no great discussion about whose interests they are serving with alacrity at this very moment. The collective citizenry, and their welfare, is far from their minds!
But, just a moment. Who is 'funding' all that tamasha that goes on in the name of government and governance? Who is paying the stratospheric costs of maintaining this expensive bunch of "ministers", whose main job seems to be to minister to the needs of their corporate cronies ? And whose money is being siphoned off when an institution built up as a result of meticulous planning and decades of hard work is "disinvested" in an instant? It is time for us to begin asking that question rather loudly...
Whose money is it anyway?
Handling money with prudence requires fiscal knowledge, experience and integrity--precisely the qualities that we least see in our ministers. The CAG's indictment of the government first on the 2G scam and recently on the Air India scam ( worth about Rs 10,000 crore and surely more, and according to many knowledgeable insiders, the first step in its disinvestment and handing over to a private player who, purely in the interests of National pride probably, is willing to take over a loss-making organization!) makes one thing patently clear--the present crop of ministers should be the ones that we should trust last/least when it comes to handling the tax payer's money.
The last straw was the inordinate hike in fuel prices that came as a post-poll gift to the 'aam aadmi'. According to the oil companies, apparently run by a bunch of retired angels, they are losing about Rs 10 on every litre of fuel sold and yet, they have, in a gesture of love and compassion, hiked the price by only about half of that. Oh, what magnanimity! At this rate, if we are to believe their protestations of loss, they should have gone right under a long time ago. And this country would not have been poorer for that!
What beats all logic is that it is in the midst of this long history of "loss making" that the oil companies are vying with one another to open another 1,000 fuel outlets in a small state like Kerala. It beats me when it comes to understanding their logic. Ah, maybe they want to exhaust all their stock and commit "hara-kiri" and die trying their best to help the motorists..like a candle in the wind that burns itself to nothing. Ho, the poor heart bleeds when one thinks of that... No wonder Murli Deora, the former petro minister always wore a pinched look when he was talking about oil companies and fuel prices. Who knows the heartaches of heading a ministry cursed with perpetual losses and perdition??
It is unlikely that many of us saw a small news item in the papers (no, such small stuff is below the "sensation level" of the TV channels) a few days back. The headlines merely notified us that Rs 20,001 crore was being paid to the oil companies as subsidy by the government. Naturally this was to compensate the losses that the companies had run up. This was in addition to the earlier instalment of Rs 20,911 crore, which took the total subsidy for 2010-11 to Rs 40,912 crore. The total loss for last year was, according to the companies, Rs 78,000 crore, and naturally they demanded their pound of flesh by asking the government to cough up another Rs 30,000 crore. But our beloved government, in a gesture of supportive sympathy to its 'subjects', roundly rejected this demand! What more do you want??!! The figures make for interesting reading -- for those who can understand figures.
But the question that comes to the aam aadmi's mind is, do we trust these guys with such astronomical sums of money? ... our money?? It is a very funny situation. The oil companies import crude, refine and sell it in India for a loss. The government compensates them not fully, but as and how they deem fit, with a subsidy. Both are funded by the tax payer's money-- the public sector oil companies and the government. Now what about all that Indian oil from Indian wells? And who is the loser? And who is the wiser??
Now will somebody tell me how much a litre of fuel will cost if somebody were to import it and sell it like many other imported commodities? I put the question to a few trader friends and they tell me, quoting the prevailing prices, that it should be way cheaper than the price at which we are forced to buy it now. Ah, the taxes, both central and state, on every litre of fuel. What is the tax money on fuel used for? For developing 'infra-structure' in the related fields--that translates as oil wells and refineries, roads, vehicle manufacturing etc etc.
Oh, that means we the tax payers are funding oil exploration, and we own the producing oil wells in India. What returns are we getting for all that "share money" we have pumped into that? Pretty little. The arithmetic of the oil companies become clouded when the question of the quantum/pricing of local crude/refined fuel comes in. But now the trend is for the public sector company to explore and dig productive wells and then give it all away to players like Reliance. Nobody has forgotten the move for handing the Assam refineries to them on a platter by the crony minister. But then the sad truth is that a large percentage of the tax on oil is goes to fund the existence of the top heavy and extravagant "gaddi" of ministers and their coterie.
Those who had been paying some attention to the annual budget for the year would have noticed the crores and crores of corporate subsidies allowed. To what purpose? How does that benefit the 'aam aadmi'? We have to stop this mindless spending of our hard-earned money by an inept bunch of ministers and other functionaries. If oil is to be decontrolled, let it be decontrolled fully so that anybody can buy it for the prevailing international rates and not the "fixed" rates as dictated by the "conglomerate". And whatevery subsidies are given have to be seen to reach and to benefit the end-user. No sir, we dont trust the oil companies, nor our beloved bunch of ministers. So please get off our backs with your complicated fiscal calculations.
In an era when liberalization, globalization and privatization have proved to the bane of the common man in every developing economy, and is seen clearly to favour only the huge corporate players, it is time we asserted ourselves and brought in the necessary changes. Let us keep the CO2 emissions at bay by curtailing oil consumption. Let us develop our public transportation systems which would be mor eficient and cheaper from every angle. And let us see how much oil we have here in our wells, and at what price we can sell that without earning a loss for the public sector firms. Let us ration that fuel so that the public sector and the transportation sector and the public get their due share without driving up inflation. If you want more than your share, you could go for imported fuel at a higher price.
We have to end this conspiracy. They manufacture more cars and drive up the expectations of people with fancy ads. Then they charge you through the nose for the fuel and siphon off our money for their mindless spending and skyhigh profits. Will anybody in their right senses opt for the expense of car and the tedium of traffic jams and gridlock wasting their time, to speak nothing of frayed nerves and health issues breathing in all that pollution, if one had effective public transportation? So whose interests are the government serving with this vicious circle of pricing and increasing demand?
This has got to end.
And the first step in that direction is to make the government sell the product at the correct price and not at an inflated one. The second is to rein in fuel-related inflationary trends by rationing fuel to essential services. The third is to rationalize imports and delink its price from that of the local oil produced.
Enough and more cheating has been going on in this country in the name of many things. A resource-rich country like ours could easily manage itself very well--if we are honest. For Western-educated and western-bribed and western-arm-twisted people like our planner Montek Singh or our PM Singh, this argument may not make much sense. But then on second thoughts it is time we stood up and told them in no uncertain terms that we are not recipients of their charity; rather they are the paid servants of the honest and upright tax-paying people of this country. And we want our country to be run the way WE want.
Sir, it is OUR money, and we guess WE HAVE A SAY in how you spend it for us!
Let us tighten those purse strings a bit and show them who is the boss!
* * * * * * * * * * * *
Do we need politics, and do we need a government of the kind we have now.
For our close-knit group, mostly of men, living within our limited means was the only way, whether we were retired or about to retire, employees or honest businessmen (yes, such a tribe do exist in this Mahan Bharat, now better known for its predatory corporates and their cronies for whom dishonesty is the key to success! ) or entrepreneurs. Inflation was very real for us as it squeezed our lives for no fault of ours, and it wouldn't go away despite the admonitions of stalwarts like Pranab Mukherjee or even PM Singh. Nations can easily go into what they term a deficit budget and spend much more than they have. Unfortunately such fiscal magic does not come to bail out the poor man trying to make both ends meet in these hyper-inflationary times.
The above serious questions were triggered mostly by the changing "colour" of recent politics. Gandhiji, as most of us agreed, was perhaps the greatest of politicians. But his type is an extinct breed even in his Congress party, though they took care to wear 'khadi' and the 'Gandhi cap' till recently. Not any longer. In these enlightened and modern times of 'gen text' and social media, khadi has gone God alone knows where. And if anybody wants to have a look at the 'Gandhi cap', s/he could go to Jantar Mantar or wherever else Anna Hazare is --he wears one proudly; and by God, it does suit him! Perhaps it is good that Congress has jettisoned both Gandhi and his cap and khadi at one stroke. But we are likely to agree that politics of the right kind is the fuel that powers any healthy democratic society. But the trouble with today's politics is that it is one hundred per cent party politics --and if you are not a party maniac, there is pretty little for you there.
Now how about governance? Those that are old and experienced will surely know that orderly governance rather than unfettered anarchy is what gives a well-rounded fullness to life. Now what all areas do we need to be governed in as a people? First and foremost, law and order in society; then a happy compromise has to be maintained between the conflicting interests of the billion citizens of this nation, and that calls for some policies that are acceptable to most and that will guarantee the welfare of virtually all. Healthcare and social security/welfare also call for a strong framework of governance. Regulating the economic mechanisms of a teeming nation surely needs perspicacious governance. And, looking outwards, taking care of ourselves and proactively interfacing with the alien nations of today's shrinking world requires great acumen in governance. A closer look would reveal that every collective human activity in society and a nation demands policies of governance which shall put the collective needs and aspirations of its people uppermost.
When you start thinking like that, do we dare to call the bunch of dissembling, opportunistic, arrogant, profiteers manning the machinery of government at the current moment a government? There is likely to be agreement that there need be no great discussion about whose interests they are serving with alacrity at this very moment. The collective citizenry, and their welfare, is far from their minds!
But, just a moment. Who is 'funding' all that tamasha that goes on in the name of government and governance? Who is paying the stratospheric costs of maintaining this expensive bunch of "ministers", whose main job seems to be to minister to the needs of their corporate cronies ? And whose money is being siphoned off when an institution built up as a result of meticulous planning and decades of hard work is "disinvested" in an instant? It is time for us to begin asking that question rather loudly...
Whose money is it anyway?
Handling money with prudence requires fiscal knowledge, experience and integrity--precisely the qualities that we least see in our ministers. The CAG's indictment of the government first on the 2G scam and recently on the Air India scam ( worth about Rs 10,000 crore and surely more, and according to many knowledgeable insiders, the first step in its disinvestment and handing over to a private player who, purely in the interests of National pride probably, is willing to take over a loss-making organization!) makes one thing patently clear--the present crop of ministers should be the ones that we should trust last/least when it comes to handling the tax payer's money.
The last straw was the inordinate hike in fuel prices that came as a post-poll gift to the 'aam aadmi'. According to the oil companies, apparently run by a bunch of retired angels, they are losing about Rs 10 on every litre of fuel sold and yet, they have, in a gesture of love and compassion, hiked the price by only about half of that. Oh, what magnanimity! At this rate, if we are to believe their protestations of loss, they should have gone right under a long time ago. And this country would not have been poorer for that!
What beats all logic is that it is in the midst of this long history of "loss making" that the oil companies are vying with one another to open another 1,000 fuel outlets in a small state like Kerala. It beats me when it comes to understanding their logic. Ah, maybe they want to exhaust all their stock and commit "hara-kiri" and die trying their best to help the motorists..like a candle in the wind that burns itself to nothing. Ho, the poor heart bleeds when one thinks of that... No wonder Murli Deora, the former petro minister always wore a pinched look when he was talking about oil companies and fuel prices. Who knows the heartaches of heading a ministry cursed with perpetual losses and perdition??
It is unlikely that many of us saw a small news item in the papers (no, such small stuff is below the "sensation level" of the TV channels) a few days back. The headlines merely notified us that Rs 20,001 crore was being paid to the oil companies as subsidy by the government. Naturally this was to compensate the losses that the companies had run up. This was in addition to the earlier instalment of Rs 20,911 crore, which took the total subsidy for 2010-11 to Rs 40,912 crore. The total loss for last year was, according to the companies, Rs 78,000 crore, and naturally they demanded their pound of flesh by asking the government to cough up another Rs 30,000 crore. But our beloved government, in a gesture of supportive sympathy to its 'subjects', roundly rejected this demand! What more do you want??!! The figures make for interesting reading -- for those who can understand figures.
But the question that comes to the aam aadmi's mind is, do we trust these guys with such astronomical sums of money? ... our money?? It is a very funny situation. The oil companies import crude, refine and sell it in India for a loss. The government compensates them not fully, but as and how they deem fit, with a subsidy. Both are funded by the tax payer's money-- the public sector oil companies and the government. Now what about all that Indian oil from Indian wells? And who is the loser? And who is the wiser??
Now will somebody tell me how much a litre of fuel will cost if somebody were to import it and sell it like many other imported commodities? I put the question to a few trader friends and they tell me, quoting the prevailing prices, that it should be way cheaper than the price at which we are forced to buy it now. Ah, the taxes, both central and state, on every litre of fuel. What is the tax money on fuel used for? For developing 'infra-structure' in the related fields--that translates as oil wells and refineries, roads, vehicle manufacturing etc etc.
Oh, that means we the tax payers are funding oil exploration, and we own the producing oil wells in India. What returns are we getting for all that "share money" we have pumped into that? Pretty little. The arithmetic of the oil companies become clouded when the question of the quantum/pricing of local crude/refined fuel comes in. But now the trend is for the public sector company to explore and dig productive wells and then give it all away to players like Reliance. Nobody has forgotten the move for handing the Assam refineries to them on a platter by the crony minister. But then the sad truth is that a large percentage of the tax on oil is goes to fund the existence of the top heavy and extravagant "gaddi" of ministers and their coterie.
Those who had been paying some attention to the annual budget for the year would have noticed the crores and crores of corporate subsidies allowed. To what purpose? How does that benefit the 'aam aadmi'? We have to stop this mindless spending of our hard-earned money by an inept bunch of ministers and other functionaries. If oil is to be decontrolled, let it be decontrolled fully so that anybody can buy it for the prevailing international rates and not the "fixed" rates as dictated by the "conglomerate". And whatevery subsidies are given have to be seen to reach and to benefit the end-user. No sir, we dont trust the oil companies, nor our beloved bunch of ministers. So please get off our backs with your complicated fiscal calculations.
In an era when liberalization, globalization and privatization have proved to the bane of the common man in every developing economy, and is seen clearly to favour only the huge corporate players, it is time we asserted ourselves and brought in the necessary changes. Let us keep the CO2 emissions at bay by curtailing oil consumption. Let us develop our public transportation systems which would be mor eficient and cheaper from every angle. And let us see how much oil we have here in our wells, and at what price we can sell that without earning a loss for the public sector firms. Let us ration that fuel so that the public sector and the transportation sector and the public get their due share without driving up inflation. If you want more than your share, you could go for imported fuel at a higher price.
We have to end this conspiracy. They manufacture more cars and drive up the expectations of people with fancy ads. Then they charge you through the nose for the fuel and siphon off our money for their mindless spending and skyhigh profits. Will anybody in their right senses opt for the expense of car and the tedium of traffic jams and gridlock wasting their time, to speak nothing of frayed nerves and health issues breathing in all that pollution, if one had effective public transportation? So whose interests are the government serving with this vicious circle of pricing and increasing demand?
This has got to end.
And the first step in that direction is to make the government sell the product at the correct price and not at an inflated one. The second is to rein in fuel-related inflationary trends by rationing fuel to essential services. The third is to rationalize imports and delink its price from that of the local oil produced.
Enough and more cheating has been going on in this country in the name of many things. A resource-rich country like ours could easily manage itself very well--if we are honest. For Western-educated and western-bribed and western-arm-twisted people like our planner Montek Singh or our PM Singh, this argument may not make much sense. But then on second thoughts it is time we stood up and told them in no uncertain terms that we are not recipients of their charity; rather they are the paid servants of the honest and upright tax-paying people of this country. And we want our country to be run the way WE want.
Sir, it is OUR money, and we guess WE HAVE A SAY in how you spend it for us!
Let us tighten those purse strings a bit and show them who is the boss!
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