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Homechevron_rightOpinionchevron_rightEditorialchevron_rightThe flagrant fleecing...

The flagrant fleecing during Covid times

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The flagrant fleecing during Covid times
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The country is going through crises without parallels.  India is not free from the shadow of the andemic of Covid-19,  like most other countries.  News emerging from all over the country including the national capital tell us about the diligent defence being applied against the spread of virus.   

It is quite natural for the economy also to be hit by such a health emergency,  as is expressed in the stock market.   And this in doubt will plunge the country,  already in a deep economi slowdown,  into darker territory.   By the the central government's own admission, unemployment is at its highest for the last four decades.  In such a situation,   it would only be democratic courtesy not to indulge in measures that would add to the people's burden.    But the Modi government has not only violated this norm,  but has even set out to extract the small change left in the people's pockets.   When global crude oil prices are at a historic low,  the benefit of cheaper crude should have been passed to the people,  giving them the much-needed relief.  But the Centre has frittered that golden opportunity at the altar of crony corporates and set a cauldron through daylight plunder.  Both petrol and diesel have been imposed an excise duty hike of Rs three per litre.  Through this inconsiderate and unkind act,   the Centre has proven once again with whom it stands.   Read with it a similar steep hike of cooking gas price slapped about a month ago in a similar manner.

India is the country charging the highest price in south Asia. for fuel in real terms.  The usual factors to which this hike is attributed used to be the price rise of crude oil in global market,  production cut by various producer countries and the appreciation of the dollar.  But now things have changed.  For different reasons,  the oil market is witnessing steep price falls.  Crude price which used to hover around USD 120 per barrel has now come down to as low as USD 30-33 per barrel.  According to the 'global market' theory,  this price fall should be reflected in product prices as well - which however does not happen. Even now petrol and diesel prices continue without much adjustment.  Experts opine that in the changed scenario, fuels can be sold at half their current price.  In 2010, the price of crude was 80 dollars per barrel. At that time,  price of petrol and diesel were was Rs 56 and Rs 38 respectively per liter.   Adding facors of the new tax rates and the forex differences,  fuels can be priced only at half the levels as applied now.   

But this 'gap' is consistently filled by our government by increasing the levies;   and that is what has happened now too.  With this,  the excuse duty charged by the government on petrol is Rs 22.98 per litre;  for diesel it is Rs 18.83 per litre.  When Modi government came to office in 2014,  this was only 9.48  and 3.56 rupees per litre respectively.   Thus,  if in 2013 the central excise duty on petrol was 9.5 per cent of the base price,  now that has crossed 20 per cent, i.e. an increase by 105 per cent.  In a similar manner,  state tax also was raised to 28 per cent.  Through this tax hike,  last year alone the Centre netted an additional Rs 2.7 Lac crore of revenue.   And with the latest increase of excise duty,  the government is going to receive Rs 39,000 crore.   It is to be remembered that all this revenue is being generated by squeezing the people,  already reeling under dire distress.

It is not to be forgotten either that the blatant oil plunder started in 2011 when the authority for price control of oil was transferred to the oil companies.   The explanation offered then by the Manmohan Singh regime was that by this mechanism,  the fluctuations in internatinal oil market could be reflected in the prices.    Modi government has thrown all such rationale to the winds.   For 'checking' the price fall of fuels,  Modi government hiked the excise levy ten times.    In other words,  it is not only in line with the global market,  but also as per the wishes of corporates that price decisions are taken here. 

In the current scenario,  fuel price should have come down from seven to 12 rupees per litre.  Even providing for an excise duty increase by Rs 3 per litre,  it should have fallen by 4 to 9 rupees per litre.  When the retail prices do not at all reflect such a price reduction,  it is obvious that the benefits are directly transferred to the pockets of corporates.  And this profit-sharing deal is in addition to the Rs 2 lac crore of tax concessions granted to the corporates to help them tide over ecoomic recession.    Strong voices of protest need to be raised against this fleecing in broad day light.  Why the kind of agitations that erupted in the case of opposition to the citizenship amendment act, are unfortunately not seen in this issue,  is a matter to be seriously pondered over.

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