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Friday, September 16, 2011

Petrol rates hiked, prices go up – common man is angry (and then continues to watch soap operas in TV !)

The increase in petrol prices captured the headlines everywhere..  Only in May, the rates went up substantially by Rs. 5/- ; In earlier times the hike would come along with annual Budget – now with the Companies deciding the rate (a move by the Govt. to keep away the blame !) – the rises are frequent.  The increase is a significant Rs.3.14 per litre and in Chennai it would be around 70.82 per litre.  Sure this would draw wild reactions but the ire of the consumers would stop in a day or two.  Some would jump to say that this is time to return to bicycles, use public transport and more… but practically all the protests would be muted and in a couple of days.. it would be normal, which always help the Govt and the policy makers ! In almost a ritual, Communists would stage protests and slogan shouting but no harm done to Govt – they will continue and we may have to brace for another increase coming in a short time – newspapers would report that the rise is historical and would reel out statistics, some  even citing that in  neighbouring countries including Pakistan, it is cheaper….. but are we going to stop driving our car / two wheelers ? – most would not even know the exact price – as they go to a Petrol bunk fill up paying a round amount not caring to know – how much of litres it translates to !!

Oil companies argue that a fall in the rupee against the US dollar increased their cost of crude, forcing them to raise the price.  For the man on the streets, it would have a cascading effect – the fleecing autorickshaws would hike their call disproportionately and the impact can be felt from vegetables, clothes, rent and everywhere.  Rise in prices of essential commodities – that is “inflation”.  In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services.  The inflation rate in India was last reported at 8.43 percent in July of 2011. From 1969 until 2010, the average inflation rate in India was 7.99 %. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy.  

For the ‘common man’ – more is to follow.  After the hike in petrol, the interest rate on automobile, housing and corporate loans would go up as the Reserve Bank of India is  widely expected to hike key rates today, again as a step to curb inflation.  If the rates are hiked, it will be the 12th such exercise since January last year.   More threatening is the news that Empowered Group of Ministers (EGoM) led by Finance Minister Pranab Mukherjee are meeting today to discuss on the recommendations of the task force on LPG and Kerosene pricing.  The expert panel  has proposed that every household get only four to six LPG cylinders at a subsidised price  and for those extra the consumer would have to pay the market price of about Rs 710 for every additional cylinder.
The common man will have to grin and bear all these burdens and there would be no options.  But by the same yard stick will the Govt curb all subsidies ! – there would be more sops for the Politicians and ruling class… why they should be allowed such exquisite perks and facilities and why not they also  buy things and enjoy facilities at the market rate ?   There would always by some industries which are either run by politicians or which have strong connections to powerful politicians which will be exempted from Customs, Excise and other duties……….. 

Inflation, rising food prices, rising prices of other essential commodities would seldom affect the proletarian class.  There are reports that at least 77% of the Union council of ministers are crorepatis, whose average asset value is pegged at Rs 10.3 crore - Rs 3 crore higher than their declaration two years ago.  These are only declared values and there could be instances of persons possessing more.  Like the steep increase in prices, their assets value are also sky rocketing with one of the Ministers reportedly having an increase by 1092%    While the declaration of assets, is a meaningful attempt towards transparency, vital information like  income tax returns, present market value of assets etc  are missing in most of the declarations.

They are expected to administer strong policies in protecting and ruling the Nation. Speaking to state police chiefs and intelligence officials recently, Chidambaram said the two recent bomb blasts in Mumbai and Delhi are a "blot" on the government's record but the context of India's proximity to Afghanistan-Pakistan made it vulnerable.  It is easier to say that terrorist groups based in Pakistan continued to target India but when will the Nation ever have a strong mechanism to tackle terrorism ?

It is extremely distressing that after the recent Delhi High Court bomb blasts, there are only talks of strengthening the security at High Courts – as if the terrorists have given a written assurance to Government that they would only target High Courts and would not indiscriminately time and target any other source !!!  - the Nation witnessed sickening scenes of bloody and mangled bodies being carried,  injured citizens writhing in agony, wailing relatives, property damaged and in a few days everything is forgotten.   We have seen it all before and there is no guarantee that may not repeat elsewhere.

Very sadly, the articulate Home Minister blamed the Delhi police stating  “We had warned them a few months ago,” -  Who is We and Who were ‘them’ ? The common man is angry (and then continues to watch soap operas in TV !)

Regards – S. Sampathkumar.

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