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Tuesday, December 16, 2014

Deregulating Petrol and Diesel price benefits Political class the most!

Welcome to Indiaassuperpower, your one stop blog for views on India and Indian politics.

Recently Government deregulated Diesel pricing in India, hence making both Petrol and Diesel prices dependent on the global oil market dynamics. Actually government boasted about this bold step and rightly so as it ended subsidy burden which government carried from so many years.

So I wanted to stick to the basics and gather information about who benefits the most from this move(apart from the Government)? Any guesses whom it would benefit even more?

Ok I'll start with a real life scenario where it is clear that this move benefits the political class the most, I can also reiterate the same as 'Political class would use this move for their monetary benefit rather then working for society' and following describes how it benefits them:

We all are aware that almost all of the private transport companies(road transport/rail transport etc) are owned and controlled by the political class and we also know major reason for the same, that transport business (bus transport) is a business where you get a lot of hard cash at end of the day, and in India nothing can match the power of hard cash(we have seen this during voting days when cash is distributed freely).

Diesel prices have shrinked by more then 10 percent in last 6 months, but what I have noticed is that the transport companies(or any other businesses which has diesel as their major input cost) have not decreased the ticket prices by a single paisa in last 6 months(I can confirm this for Punjab where I have recently traveled in buses owned by ruling politicians of state) and you donot have to be super intelligent to say that hence this scenario would be in all Indian states, and we all are well aware of the fact that whenever there is slight increase in the diesel price we can see immediate increase in ticket prices. Present transport fares are ones which were prevelant when diesel was atleast 10 percent expensive then today, but there has been no decline in the fares

. Now forget about private transport companies owned by Indian politicians, lets talk about railways. There has been regular rise in prices of train fares in past while we know that Diesel prices have actually declined. Hence the extra money collected clearly benefits the already super rich politicians, rather then the poor who travel in sleepers and second class bogies by spending their hard earned money.

Now the big question is that:
In an economy where government has deregulated the price of Diesel and Petrol, Why there has been no measures to make transportation costs linked to fuel costs? particularly when the prices of oil are decreasing. JUST for filling coffins of the political class?

I don't know if someone might have thought on same lines....but according to me it is actually a daylight robbery being committed on roads and railways by the political class.

It has also provided a free hand to government to increase excise duty on petrol and diesel in name of controlling fiscal deficit.

Concluding this post I strongly believe that the sector which has diesel as major input material for them should also be directly linked with the prices. ie ticket fares of railways/buses/autos/three-wheelers should increase/decrease as the prices of crude oil increases/decreases every fortnight, as otherwise this robbery by political class would continue and they would keep on filling their coffins and poor mango-man would keep on purchasing overpriced bus and train tickets.

What are your views about the same, Do comment for a healthy discussion. THANKS for reading and if you like it that share it!