During the last general elections, Narendra Modi’s oft repeated refrain went on these lines: Every Indian’s account will find a deposit of Rs 15 lakh, a share of the black money stashed away in foreign countries. Three years down the line, a member of Mr Modi’s Ministry says: “Who buys petrol. Somebody who has a car, bike. He is not starving. Those who can afford to pay has to pay.” He said this justifying the skyrocketing fuel prices. It is indeed a stupendous somersault rarely witnessed in the political arena. No one talks about lakhs of crores of black money deposited in foreign banks; no one is prepared to stick one’s neck out on the accrued black money from the demonetized notes. The black money issue seems to have been blacked out by the ruling party and its government. Instead, the narrative has taken a U-turn. The goalpost has been shifted, not by metres, but by miles.
It is important to get to the truth behind the exorbitant rise in fuel prices. Diesel and petrol prices in some of the Asian countries like Malaysia and Indonesia are just half of what is in India. Even in our neighbouring countries like Pakistan and Sri Lanka, fuel prices are lower than in India. International oil price had started its descent in July 2014, just after the Modi government came to power. It hit the rock bottom when the prices declined from $ 107 a barrel in May 2014 to $ 28 in 2016 before stabilizing at around $ 50.
Ideally the prices in the domestic sector should have come down, but the ‘modified’ India decided not to pass on the benefit to the consumers. This is because taxes constitute about 50 % of the retail price. As the price of crude oil plummeted in global market, the NDA government went on hiking the excise duty by nine times in 2014-15 and 2015-16, preventing the domestic fuel prices from falling. The government is not willing to apply GST for fuel prices. Even the highest GST rate of 28 per cent, instead of the present excise duty and VAT, will drastically bring down the prices.
There is no better example for the shift in the narrative of the government and the ruling party than the decision to introduce bullet train on Ahmedabad-Mumbai route. Of the total cost of Rs. 1.1 lakh crore, the Japanese loan is a little more than Rs. 80,000 crore and the rest has to be borne by India. Though Mr. Modi claims that the loan is as good as free as it has to be repaid over a period of 50 years with 0.01 per cent interest, knowledgeable sources point out that the repayment amount will be much higher considering the depreciation of rupee against yen. The crudity of the huge expenditure for travelling a distance of 500 km in two to two-and-a-half hours at a cost equivalent to air fare comes out in the following comparison: F ormer Railway Minister Suresh Prabhu’s first Budget had projected a five-year expenditure of a similar amount for network expansion in the entire country. Are we going to rob the poor to pay the rich?
(Published on 24th September 2017, Volume XXIX, Issue 39)