Retail price of diesel in Delhi touched an all-time of Rs 69.46 a litre early this week. Petrol prices too have increased in the recent past. The upward movement in fuel prices at the retail level has triggered political sniping as changes in price immediately impact household budgets across many economic strata.
The Narendra Modi Government is at the receiving end of the sniping even though its actions are not responsible for the price increase. However, it’s not possible for one to sympathize with the government on this specific issue because, when in opposition, BJP cynically exploited many such moments.
Today, it is at the receiving end of Congress cynicism.
The only loser in a sense is the Indian citizen because major political parties, when out of power, make it seem as if the government can control the price of international crude.
Therein lies the source of the problem. In the early part of its term, the Modi Government reaped a windfall when oil prices collapsed. Today, the situation has partially reversed.
To illustrate, the average crude oil price per barrel in 2015-16 was $46.17; $47.56 in 2016-17 and $56.43 in 2017-18.
In the current financial year, the monthly average has ranged between $69.22 and $75.25.
There is one way to insulate consumers from the rise in crude price. This can happen if the government absorbs the price increase through a higher fiscal deficit or a reduction in spending elsewhere.
Exercising its prerogative, the Modi government has chosen to pass through the increase in crude price. Fair enough.
In the process, what’s missing is an attempt by relevant ministers to give citizens an idea of the complex trade-offs involved in the decision. But then any attempt to explain the issue will lead to the legitimate charge that when he was working towards becoming prime minister, Narendra Modi exploited a similar situation.
In politics, you reap what you sow.
DISCLAIMER : Views expressed above are the author’s own.
via TOI Blog
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