Hike in Petrol Price – A Welcome Move
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The other day a German Professor visited our University. I was taking him around different places in and around the University and he noticed the acute power shortage experienced in Tamil Nadu. He made a passing comment “When you (government) give something (power) so subsidized, this is what is going to happen in the long run. Government will not have resources to build new power plants and power shortages will be order of the day”
Yes we enjoy lot of subsidies and most of the time believes that it is our birthright to enjoy these subsidies. It is high time we change our view on subsidies especially those people who earn a six digit monthly salary.
If there is a shop, where a product is procured for Rs X and the same product is sold for Rs (X-5), can that shop survive for long? Not at all. That is what is happening in the oil sector also. Petrol prices are linked to the global market and government cannot always buy the product at market rate and sell it at a much lower price. Yes, for the economically weaker section the government has an obligation to provide some subsidy but for people who can afford why should they be given subsidy?
Same should apply to all subsidies. Right now government is providing close to 50 % subsidy on cooking gas cylinders. There are lots of people who can afford to buy the gas cylinders at normal market rate. Why do they be given subsidies and in turn burden the government? There was a proposal few months back to limit the subsidy to 4 gas cylinders which was a great move. I am not sure what has happened to that bill but I feel such rules should be made into law.
If one wants to see
India as a
super power, it is essential that all the subsidies be phased out. It is good
to start with the petroleum sector and in this regard the hike in petrol prices
is a step in the right direction.