Deregulating Petrol and Diesel price benefits Political class the most!

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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!

Indian Political class - pre Independence and now

Winston Churchill once said "when ever we leave India, It would be ruled by the goons" and looking at present condition of the country and deeds of the political class. The statement is proved true even after 67 years after gaining independence. When an officer halts illegal activity then the ruling class dismisses the officer and dictates to ruling party that if they say anything against the decision then the support of their MP's in Parliament would be taken back. Every person in power rules their people rather then administering efficiently for their upliftment. PreIndependence era was 100 times better wrto law and order, implementation of laws and another merit about British era was that we were much better placed in transport sector in pre independence era, train journey from Ambala cantt to Amritsar took 4 hrs then and it still takes 4 hrs in superfast class of trains....isn't it shameful.

In India a major portion of the votes which are given is often purchased by the candidates(who have deep pockets filled with money which they gulped in their last term). Majority of the people put votes by keeping their castes in mind and making as goon win elections(from their own cast), rather then choosing a candidate with clean image. Some percentage of Indian voters are really really foolish(according to me) as we can clearly see around 30 percent of criminals representing people, These criminals would never ever be convicted because as they say "supremacy of parliament should be maintained" and they are above the law. This bloody notion that Parliament is above all other institutions(even the constitution) is helping in shielding the criminals/corrupt people who have reached there by hook/crook and muscle power.

The whole bloody system is corrupt, people are sleeping, Political class is doing nothing for country as various initiatives which were good for country like "Hum do hamare do" for controlling population is no more advertised and is informally taken back by the government with the sole reason being that if population is controlled and people start studying till the level when they can understand things good for country then they would root out the present political class, So why hit your own feet with axe. When Politicians follow approach of "Divide and Rule" over people rather then unite them together for the country, Looks like the political class have put country up for sale, everything can be purchased here votes, goons, riots, disharmony, and we are thaught that britishers played "Divide and Rule". I still think that if Britain didn't go bankrupt after second world war then they would have administered us for a longer duration and we would have been technologically ahead by atleast ten years as of now.

I still firmly believe this country needs a revolution against corrupt political class, so that we can maintain the rich history we possesed, rather then saying britishers took it all away, whereas actually it's the political class which is taking it all away from the country and selling the country to foreign hands. I somwtimes wonder about why in USA the party which wins the election and forms government is termed as 'Administration' whereas in India we are 'ruled' by the politicians which we elect. God save this country because if some offcial wants to do right he/she is transferred/suspended (for example Ashok Khemka and Durga nagpal), there would be many others which the media class is not paid for to highlight.

GOD SAVE THIS COUNTRY from going to the gallows!! JAI HIND!!

IT Industry - set variable component proportional to (USD rate+proj profit margins)

IT industry is the only bright spot if we see rise of Indian economy over last 5-6 years, rest I don't think there is any other sector which stands apart barring maybe we can say auto sector where India is trying hard to become hub for small cars(but that still has long way to go). The Indian IT sector has shown the nation and the government "power of general class". Since government is playing vote bank politics by giving reservations and killing competition(which is infact even more important in rising of good breed of officials and bureaucrats).

With no reservations at all and jobs based on merit and knowledge, IT industry has shown the nation and political class the power of general class. With good salary packages to performing individuals it has been truly competitive economic sector. Other advantage with the IT sector is it's billing model, as it bills the employees in USD's but pays in INR, thus the IT companies enjoys high profit margins, and this rises when rupee value falls in international markets.

In this post actually I thought of why not Indian IT companies change their compensation model where variable component of an employee should vary with exchange rate of US dollar and project profit margins. I think this would help in bringing even more competitiveness in employees for making project rating better in order to increase their variable component and thus their take-home. Their are/mightbe limitations for this billing model with respect to daily exchange rate fluctuations, but for that case we can see the average for a quarter of year or the variable pay cycle applicable(so that employees might not feel cheated or underpaid). This model would raise the work done by the payroll department though.

Also read: Fundamentally weak Indian economy

So in this way of calculating employee compensation I come to following formula:
So employee Compensation = fixed compensation(80%) + variable part{(proj profit* USD rate/project employee strength) + (employee client feedback)}
Does it make sense?
Presently employee variable is not affected by prevailing rate hence margins of IT companies rise even with lesser number of new projects, buit employee feels cheated over forex gain made by the IT company. What do you think about this model? leave your comments for in favour or not so good model, or flaws which might come in practical use.

Fundamentally weak economy like India can never grow as policies affect

In last couple of decades in world economic history, only one country stands out ie 'CHINA', In developing it's highly competitive manufacturing based economy especially in Consumer electronics and in all the sectors, China has become lone manufacturing hub of the world. You see any thing and it's 'MADE IN PRC' written all over it. Indian economy has never cleared even the heats to compete among the top manufacturing countries.

Recent turmoil in Indian economy (with USD reaching 61 INR levels) is a testimony to fundamentally weak economy. We can boast only of services sector alone, but services sector can never be considered as helpful in creating a fundamentally strong economy. Indian market has become a puppet in hands of foreign players and government an agent in helping them establish their footprint.

Other thing which adversly add's to fundamentally weak economy is the high level corruption which prevents foreign companies to invest in India. When Indian government wanted to dis-invest some stake of PSU recently, there were hardly any takers for the freed share. This is because FII's fear that government would sleep and do nothing in making the employees of PSU's competent. Union ministers donot give clearance to Foreign projects until their portion of bribe has been transferred, social groups come in for halting the development of a financially weaker area etc etc.

Many of the small scale manufacturing units have closed down in recent past only because instead of making their own products they are now acting as import agent and have starting importing their products from China, this has effected manufacturing capacity of Indian economy very badly, there are job losses(direct and in-direct job loss). recently one of my relatives who is manager of a company which is into Container manufacturing business noted that, the container which has least manufacturing cost of 2.25 lac's when manufactured in India, can be imported from china with all inclusive price(shipping, import duty etc) of 1.75 lac's. This has further hampered growth of heavy industrial goods manufacturing in India. Prices in India is higher due to corruption in the working system of the country.

We are unable to feed our people using our own products as our manufacturing has slowed down wrto growth of the population. This probably because political class hardly cares about the country instead they are busy filling their own coffins. This is proved when recently central government put a ban on onion export as prices in country are rising because of rains in Maharashtra's onion producing region, but coalition partner disagreed with center's decision citing that it would destroy India as competitive agro exporter in world(Pathetic logic as native citizen has first right on country's resources and farm produce), so when we have such species of politicians present, It looks very difficult for Indian economy to become fundamentally strong and we can never think that our exports would surpass our imports in coming years, until government focuses on local manufacturing and rises import duty without thinking of their individual benefits before nation's.

A weak manufacturing economy an never be fundamentally strong economy and people should not live with notion that our economy is fundamentally strong.
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