Monday, July 5, 2010

Another bandh

Well, we have gone through another bandh. Long weekend for some, misery for many. Apart from that has the event contributed anything?

It was said by the organizers that the purpose of the bandh was to make the Government of India aware of the people’s protest against the increase in petroleum prices. One would assume that if the Government consists of sensible people, it would have known that the hike in petroleum prices would make every Indian unhappy. The loss of crores of rupees caused by the bandh was not required to get the message across.

LK Advani is reported to have mentioned that for the first time all the opposition parties came together. That would have been a happy incident if some sensible solution was put forward by them to tackle the issue. At least those among them who are ruling some of the States could have come out with a declaration that their States would forego the windfall that comes by way of Sales Tax every time the petrol prices are increased. No, that is more of unbudgeted money to spend.

Left ruled States, Kerala, West Bengal and Tripura were faced with the possibility of two bundhs on the same issue within a week. The Chief Minister of Tripura said no. One must congratulate him on that. Also to be congratulated is the Kerala Civil Supplies Minister. He has warned merchants of stern action if prices are unfairly hiked under the excuse of fuel price hike. Imagine, truck owners started off by demanding 30% increase in rates for a Rs.2 per litre diesel price mark up!

In my opinion the BJP should have a rethink on its approach. It unlikely to gain anything by aligning with the Left. There is the example of the Congress – that party moved ahead once the Left withdrew support. BJP is a party which might head the Government of India again. They should take a more objective and mature view.

It is a reality that the oil prices in the international market fluctuate. A government cannot constantly and indiscriminately absorb the increases to subsidize a price level in the home market.

Perhaps the think tanks of the major political parties should sit down together and work out a price escalation formula for future applications.

Please also see Tackling the oil crisis


Anand Antony said...

Good post. Can't agree more. The reasoning is so clear. And by the way it is only the poor who are hurt by this. The rich may be at most slightly discomforted. May be the only thing the ruling Government can do is to make sure that the oil companies don't create artificial price hikes. Good example by the Kerala Civil Supplies minister.

perumalythoma said...

Good to see you back, Mr. Tharakan.
Don't you think the Congress is laughing? The rest are so splintered that the government so confident that it can get away with fuel price deregulation! Would you have thought this possible 5 years back?
Sorry to plug a link. But thought this was relevant in the context.

Meera's World said...

Happy bandh!It has become way too ordinary that it felt like just another bandh day!Thats all!!And when i see the govt's ads on TV boasting about their 4 yrs achievements,especialy about peace in the state!! feels like puking..

Anand Antony said...

Perumalythoma, deregulation is anecessity. If the price is regulated then GOI will have to find money from somewhere to fund the difference from international price - there is nothing as a free lunch. Of course GOI can do selective subsidization to protect the vulnerable - but doing this is very complex and all parties should sit together and find a way out in the interest of the nation. Have any party (ruling or opposition) put forward any suggestion?. I am writing this because you say that the government can get away with deregulation. If I was reading your comment wrongly please accept my apologies. By the way I liked your article in Yentha, especially the hypocrisy part in relation to children. May be this type of hypocrisy runs deeper among Keralites including me!

Nebu said...

A major component of the fuel prices is the different taxes levied on it. If the Govt. cut the wasteful expenditure incurred by it under different heads the taxes could also be lowered considerably and there by off set the increase in prices.
One example of Central Govt wasteful expenditure: Department for implementation of national language.
One from the state Government: Kerala State seed development corporation!
Likewise hundreds.......

perumalythoma said...

@ Anand Antony:
Completely agree with you that deregulation is necessary.
What I intended to convey was that the Opposition is so splintered that the government can enforce deregulation without bothering too much about political consequences.
Frankly, the Opposition is unable to perform its designated role - oppose.
Thanks for checking out the yentha note.