Bharat Bandh and exploring ways to reduce fuel prices

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“By failing to prepare, you are preparing to fail.”

– Benjamin Franklin

 

 Monday’s Bharat bandh was the first pan-India campaign through which the Congress is trying to lead a consolidated opposition against the BJP. With 21 parties extending support to the Congress’ call for the Bharat bandh, the shutdown has projected the growing strength of a united opposition in the run up to 2019 Lok Sabha elections. However, the failure of Congress to widen its platform of opposition parties (SP, BSP, Trinamool did not join hands)  and convince them to be part of a joint programme is a cause for some worry. The nationwide shut down to protest rising fuel prices received mixed responses. In several states including Assam, Arunachal Pradesh bandh received support of the general public who are hit hard with the growing prices of fuel. There have been claims and counter claims as far as success of the shutdown is concerned. Yet, there is no denying that public response to Monday’s Bharat bandh offers both the Congress and the Bharatiya Janata Party (BJP) reasons to cheer and worry simultaneously. The public anger against BJP is now not just being expressed through opinion polls, different surveys but is visible on streets. For the Congress, success of bandh in the states where it is the principal opposition and in states where it has politically significant allies, proves that the party has succeeded in converting people’s anger against the ruling party into some form of protest. The Opposition has definitely scored a political point out of this shutdown.

The unusual spurt in diesel and petrol prices as a result of deadly cocktail of surging global oil prices and falling rupee value signal danger to the country’s economy, which is on the path of recovery clocking 8 per cent GDP in the first quarter of this financial year. Besides surging global oil prices and falling rupee, one of the reasons for high domestic fuel prices is the high taxes both at the Centre and states as petrol and diesel are considered to be sources for revenue mop-up. The central excise duty on petrol and diesel more than tripled between 2013-14 and 2017-18. During the same period state VAT increased more than 38 per cent. The excise duty on petrol increased from Rs. 9.48 per litre to Rs. 21.48 in four years. In case of diesel it increased more than four times from Rs. 3.56 to Rs. 15.33.

Rising petroleum prices have a twin impact on inflation: via increased travel costs and a rise in transportation costs. The UPA government had drastically cut taxes in fuel prices as well as import duty on crude to zero per cent to ensure the suffering of common man was minimized as crude oil prices surged and touched a high of $147 a barrel at one point of time, whereas BJP-led NDA government used falling oil prices as opportune moment to mop up additional revenues by substantially hiking taxes. The Modi government should do two things that will be genuinely pro-consumer – (a) bringing petroleum products under the purview of GST and (b) throwing open the market to independent fuel retailers (IFR). The states can take the cue from Andhra Pradesh – where the government decided to go for Rs 2 cut in VAT on petrol and diesel – to reduce the burden on the common man.

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