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The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.
— M. J. Akbar
in India Today, dated 10-1-2011
54 Fuel Pricing — Death by policy
The new Union minister for petroleum and natural gas Jaipal
Reddy can implement the brightest ideas from the smartest bureaucrats and yet
the root of the problem that resulted in the murder of Mr. Yashwant Sonawane, a
district official in Maharashtra who sought to curb the adulteration of petrol
by the kerosene mixing mafia, will not be touched unless India’s fuel pricing
policy is shaped by the logic of simple economics. Various estimates have been
provided in the past few days of the size of the domestic black market in
kerosene. Some put it upwards of Rs.16,000 crore annually. This is a huge amount
of money that can finance large and even globally powerful mafias, not to
mention two-bit gangsters like the ones who killed Mr. Sonawane. There was a
time when Mumbai was in the grip of smugglers. With some simple policy steps
like lower tariffs, liberalisation of gold imports and such like these
all-powerful mafias were marginalised and largely confined to Bollywood movies.
In the case of kerosene and diesel an export smugglers mafia has been created
with India’s lower priced fuels smuggled to Nepal and Bangladesh.
The only way in which mafias get eliminated is by the
elimination of the economic basis for their existence. It is not prohibition
that finally ended the power and wealth of bootleggers and illicit liquor mafia,
but a liberal policy that allowed the sale of properly priced alcohol.
As a first step, the Government must reduce the price
differential between diesel, kerosene and petrol. This will not only have the
positive effect of reducing the fiscal burden of the humungous oil subsidy, but
also encourage a more rational use of both diesel and kerosene. The
under-pricing of these two fuels has encouraged the growth of highly
energy-inefficient and environmentally dangerous means of power generation and
fuel utilisation. Moreover, for an import-dependent country like India
subsidised fuel increases the trade deficit and contributes to external payments
problems.
(Source : Business Standard, dated 31-1-2011)
