Fuel price hike has hit the common man and farmers
Higher price of pulses and edible oil is like rubbing salt to wound
With skyrocketing of almost all essential commodities specially Pulses, and edible oil , petroleum products and cooking gas (LPG) the common man specially people from lower, lower middle and middle class are badly affected their budget has badly failed because their income has not increased in proportion to increase in inflation. Effect of Covid 19 on people’s income has yet not normalized. Job condition has yet not improved In such an economic scenario these inflationary trends are like rubbing salt to the wounds.
The main culprit is the rising cost of fuel. Diesel and petrol both are going to touch Rs.100/- per litre and a LPG cylinder is costing about Rs. 800/-. Fuel price hike affects the entire economic activities farmers are worst sufferer their tilling, irrigation, sowing, harvesting all depends on fuel specially diesel. There is no doubt that this time the increase had a major international cause. The oil producing countries have cut their production to coup with the loss and damage they have faced due to less demand during Covid 19 last year. But when the prices of crude oil had nosedived the benefit was not transferred to Indian consumers lesser the cost higher the tax was the policy of the government then which still continues. Taxes account for more than 60% of the pump price of the fuel. Major part of this are central taxes and a smaller part is levied by state governments. The base price freight and dealer commission amounted to just Rs. 35.78 for petrol thus about double of this is collected as tax by the governments. State governments of Rajasthan and Madhya Pradesh levies highest Value added tax (VAT) on fuel. Is it not surprising that these fuel items are sold on almost half of the price in our neighbouring countries like Nepal Sri Lanka and Pakistan. The union government has significantly increased the tax on petrol and diesel.
State governments too are not lagging behind. In a sense the fuel has become a “Dudhaari gaay (Milching cow) for the governments. It is the major source of their income. The situation may improve if both state and central governments decides to cut taxes on fuel. State government’s financial condition is very tight. After imposition of GST their own revenue generating sources have almost dried adding salt to the injury the central government is not paying their due share in GST because of the poor collection. So hoping that state governments will cut their taxes on fuel is like day dreaming, it is the union government that can do it but there has not been any sign from the government side that it will give relief to consumers by cutting taxes on fuel. Rather it has adopted its time tested method of blaming the previous Congress government for fuel price hike forgetting that since last 7 years it is the power and such blames on previous governments make it the laughing stock by every reasonable Indian. The onus of bringing down the fuel price is solely on union government it has to cut its excise duty and other taxes including farm cess of 4/-on diesel and 2.50 on petrol.
According to government’s own data the rate of inflation based on wholesale price index (WPI) was up from 1.22%in December to 2.03% in January on the back of sustained rise in the prices of manufactured items. Though the cereals and vegetables specially potato and onion prices have come down but pulses and edible oil prices have almost doubled in last few months thus negating any benefit to common man. Nosediving of potato prices may be benefitting consumers but the farmers are weeping as they are not getting even their production and storage cost.
The government has to show some flexibility in deciding the taxes on petroleum products this will automatically bring down prices of essential commodities and farmers plight too will be minimized. It will also increase agriculture production. This is the time of last irrigation of wheat which most of the farmers are avoiding due to hike in diesel prices and uncertainty of getting better rates of their produce. Neither the oil producing countries are going to increase the production on our demand nor the blame on previous governments is going to ease the inflation it is the government which has to rise the occasion. Blame game may be a political tool but it is useless in easing the crisis.