Thursday, July 5, 2012

Fuel mathematics

Jagjit Singh, our most beloved gazal singer, had once said: “These ‘aroh-avroh’, ‘utar-chadhav’ are all complex mathematics of music,” though he himself made simple music which was easy to the ears.

However, these utterances of our legend fit our fuel pricing. The government has made the calculation of petrol price very complicated. On one hand it gives subsidy on the fuel, on the other hand it levies various taxes and other charges making the fuel unaffordable, even for the well to do. Every time the price of petrol increases, there is hue and cry from the government that the administration is losing quite a chunk in subsidies. Some experts opine that the actual cost of petrol is very low, between forty and forty two rupees. The rest are taxes - central and local, vats, road improvement tax, education cess and what not, making it complicated.

All this is humbug. It is a simple formula related to scams. To make it simple, when there is increase in petrol price, it directly affects almost all commodities-right from bus, auto, taxi fares to food and other consumer items. Similarly when scam occurs, it has direct affect on petrol. When there is a scam (and there are many) our politicians are sure that the amount of the scam cannot be recovered. Whoever can recover anything from Kalmadis, Telgis, Hasan Alis and the likes? No, that huge amount of tax payers’ money in hundreds and thousands of crores is gone down the drain (drains named Kalmadi, Telgi and Hasan Ali and others) forever. On top of that there are litigation and cases and inquiries that run forever costing huge money to the administration. Already our central and state governments run on deficit budget. And in these deficits, scam amounts are not provided for.

So what do we do? We already have various taxes- income tax, sales tax, central tax, vats, toll tax, road tax, octroi, TDS, professional tax- you name it, we have it. So we have come out with a simple solution. Increase petrol prices and make its calculations complicated. Kalmadi has scammed for four thousand crores? Increase petrol prices. Telgi has scammed another twenty? There is our petrol to recover it from. Our budget - national and state- should remain the same. People’s budget be damned.


Header image credit: adapted from David Niblack

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