Fuel for Modi’s 2019 bid

The rise in crude prices in the international markets is not the reason we are paying for petrol and diesel through our already over-dilated nostrils. The correlation between the two is a piece of fiction, plausible only from a short-term view. The price of crude, it is true, has gone up recently. But it is perversely untrue that there is any steady correlation between crude prices per se and what we are made to pay at gas stations.

Consider this. When crude was selling at $130 per barrel a few years ago, petrol was available to us at about Rs 50 per litre. Today, crude is selling at around $80 per barrel, and we are paying over Rs 80 per litre of petrol. In Pakistan, petrol costs only Rs 50 per litre even today. Pakistan, too, buys crude from the same market. Among all countries in Asia, petrol is costliest in India. The rate continues to climb.

Or, consider this. GST was showcased as the “second freedom” for us. It was ushered in, reminiscent of 14 August 1947, at the stroke of the midnight hour. We were assured to have entered a new era — the “Good and Simple Tax” era — in revenue mobilisation. Why, then, are petrol and diesel excluded from this ‘good and simple’ boon for citizens?

Some 80% of our petrol and diesel requirements are met through imported crude. Our economy is oil-driven. The income, via excise, to the government from petrol and diesel is astronomical. Currently, we pay 51% of the total cost of petrol at the pump in the form of taxes and cesses. So, each time we buy petrol worth Rs 100, the central and state governments make Rs 51.

But that is not all. Thanks to all other items being in the GST basket, the cascading effect of the hike in prices of other commodities in the wake of hike in petrol prices entails huge hidden bonanzas to the government. So, it is in the interest of the government, and against that of citizens, to let petrol prices go ablaze.

There is no point in saying now that Modi, in the run-up to 2014 general elections, had promised to keep petrol below the Rs 50/litre mark. Election promises are hypnotic jokes and those who pitch their hopes on them have to thank themselves for their stupidity in doing so. So, the BJP spokespersons — one wonders why NDA partners have no spokespersons, or, if they have, have nothing to say — are ready with their predictable defence.

The Modi government wants to invest the revenue generated through the petrol-diesel overkill in the social sector. The poor — farmers included — are going to benefit big-time. The countryside is going to go Swiss. So, rather than control petrol prices, they are busy controlling our anger and anxiety.

We are thus required to swallow the canard that the only way the poor and desperately beleaguered farmers can be provided any relief at all is by petrol-bleeding the rest of the country. What, one may ask, about the taxes — direct and indirect — we are paying? Tax collection, since demonetisation, is trumpeted to have gone up by 17%. That is a lot of money. What about the lakhs of crores locked up in NPAs? What about the Rs 2.3 lakh crore written off just last year as bad debts, the moneys whittled away from our banks by some of the richest in the country?

The truth is not too obscure. The inflammable spiral of petrol prices points to 2019. Some six months or so from now, we can expect a slew of pro-poor measures and schemes, especially those that lend themselves to propagandist euphoria -- the counterparts of IndiraGandhi’s “garibi hatao”. The significant advantage in keeping a majority of the people poor and desperate is that even small tokens handed out to them in a well-timed fashion will have a decisive effect. The gratitude of a people towards those who dish out rare charity to them is directly proportionate to their distress-level. For a thirst-slaked throat, even a drop of water is a big boon. It will cause gratitude to sprout.

Powered by petrol

It is a risky business to make conjectures. Even so, we will not be far off the mark if we assume that the crucial 2019 elections will be powered by petrol. All of us could be, in that case, contributing indirectly to the BJP’s election prospects.

To me, this is a welcome thing. In view of the growing destitution and desperation of millions of our fellow citizens, any token of state charity, any time, is welcome. There are times I wish there were annual elections in this country; for that is the only time politicians remember or admit that there are poor and suffering people in India and that they, too, need to access the crumbs that fall from the master’s table.

I would expect that the NDA— I mean, Modi Sarkar —will address the issue of the raw deal that millions of our workers in the unorganised sector have been getting for decades. Some measures to alleviate the suffering of farmers, too, can be expected. Health insurance for 50 crore low-income families — a trial balloon floated through this year’s budget — could receive some fiscal makeover. Some tokens to appease enraged SC/ST segments, too, can be expected.

But all of these will be one common denominator. The measures announced in view of the 2019 elections could go the way all such previous announcements have. The reality on the ground may not change, except in a fleeting fashion. When it comes to providing for the poor, the challenge is to make promises perform.

Funnily, it doesn’t occur to the government— no, not even to the poor and lower middle class — that the poor are hard-hit all the time by skyrocketing petrol prices. The rich and upper middle classes are hardly affected. The burden falls, almost entirely, on those who are deemed no more than beasts of burden.

(The writer is former principal, St Stephen’s College, New Delhi)