Fuel, food hikes:Systems failure?
With petrol prices hiked by `1.80 per litre on Thursday midnight, for the second time in less than 45 days and the 13th time since the decontrol of petrol in June 2010, there was a predictable outcry by the Opposition and in political circles in the name of the so-called “aam aadmi”. Even a key ally of the government, Trinamul Congress boss Mamata Banerjee, made some predictable noises, but that appeared more because she wasn’t taken into confidence before the hike was announced. She has very few options as she cannot really quit the government as she used to in her younger days. The real bad news for the “aam aadmi”, however, is that food inflation continues to burn a hole in his pocket. All along the government’s key mandarins, the PM’s economic advisers and bureaucrats had told him prices would fall after a good monsoon. It was just so much wool over his eyes. But this ubiquitous “aam aadmi” makes less of a ruckus than those who happily pay `500 for a multiplex movie ticket or buys a fuel-guzzling SUV as a second car. The better-off in India have become so used to subsidies that even outfits like the national cricket board, film producers and entertainment firms line up to wangle concessions on entertainment tax while making crores of rupees in profits.
But that is only the sub-plot. The real story is the total mismanagement of the system by the government. It’s not as though, if petrol prices were not hiked, problems like inflation and high prices would disappear. For instance, in food, thousands of tonnes of food (worth `50,000 crores two years ago) are rotting in godowns but the government has no idea how to distribute it to people who are starving and malnourished. Tonnes of perishable vegetables have to be destroyed as there are no cold chains or warehouses where farmers can store their produce. The government clearly lacks the political will to create an efficient delivery mechanism to cushion the really poor and those hovering above the poverty line against the vagaries of high prices.
This same mismanagement prevails in education, healthcare, the power and transport sector as well as in job creation. It is compounded by the lack of accountability of various ministries involved in this colossal failure. Now a hike in diesel prices looms, while the government is not prepared to stop subsidies for diesel car owners, telecom tower owners or the better-off in both urban and rural areas who use diesel generators or diesel pumps with abandon. Carmakers, meanwhile, have been merrily making hay, coolly taking advantage of low (subsidised) diesel prices to charge buyers more for diesel cars over petrol cars.
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