I am proud of my Prime Minister. His quote from today is inspirational "...If we have to go down , lets go down fighting:". If ever there is a quality that needs to be appreciated, it is courage. I am proud of the Prime Minister for having displayed this rare quality of courage and standing up for what is right. I wish he had displayed this an year or two ago, it would have saved him the ignominy of being called an underachiever in an otherwise illustrious career.
Today, the government has kicked inaction in its face. The government has broken the shackles of paralysis that its policy makers were accused of lately. It has chosen to not get embroiled in mud slinging, coal-gate or the numerous other allegations that have come up in recent times.
They made a bold move but, what did the government do today?
One, They raised diesel prices. The hike is sharp at five rupees a liter and it probably wouldn't have been if the government had displayed courage in hiking it nominally over the last three years. The truth is that the price of a non-renewable source of energy will continue to escalate with time. The government in its bid to be populist has subsidized it all along, leading to a higher fiscal deficit. The fiscal deficit has meant a downgrade in India as an investment destination. Already, the government has a 72 hour ultimatum from Didi to roll back the price hike. Her argument is that it will have a cascading effect on all commodity prices.
I delve deeper into this myth to understand how much this fuel price hike impacts the Aam Aadmi that Mamta Banerjee stands for. By my estimate, with some help from a few truckers, I rationalize the cost of this price hike. A seventeen foot truck consumes about a liter of diesel to travel 7 kilometers. So, at erstwhile prices, the cost of fuel per kilometer for a truck was 5.76 per liter ( assuming Gurgaon prices until recently). Now, that would increase to almost 6.48 per kilometer. Sharp hike indeed.
Lets assume that a truck covers a distance of 300 kilometers to ferry vegetables from somewhere in Punjab to Delhi. Therefore, the net increase in fuel expense is Rs. 216 (6.48-5.76)*300. At normal load, the truck has a capacity of 75 quintals or 7500 kilograms.
The net increase per kilo of any commodity goes up by Rs 0.028 or 3 paise. Who can't afford it?
The other people who are horribly affected by the fuel price hike are poor mortals like me who own diesel guzzling SUV's. The government has been more than kind to subsidize my fuel bill and its about time that I start paying for myself. Hell, its still cheaper than driving on petrol!!!!
The other thing that the government did today was open up FDI in retail and aviation. I am not sure if they are good or bad moves. I leave this to the economists and the leaders to decide. I do follow the sensex and it seemed happy about the move. The rupee felt even happier. I think the Sensex knows best.
In all the good that seems to happening, the politicos are bickering, again. The allies want to fight the government more than the opposition. They are issuing statements and giving ultimatums. Will the government go down fighting?
If it does, I would be unhappy. For once, the government and the Prime Minister have shown courage. It reminds me of Lt. Colonel Frank Slade's legendary speech (Scent of a Woman), " he isn't selling anybody out to buy his future. That, my friends is called integrity. That's called courage. Now that's the stuff leaders should be made of"
Today, the government has kicked inaction in its face. The government has broken the shackles of paralysis that its policy makers were accused of lately. It has chosen to not get embroiled in mud slinging, coal-gate or the numerous other allegations that have come up in recent times.
They made a bold move but, what did the government do today?
One, They raised diesel prices. The hike is sharp at five rupees a liter and it probably wouldn't have been if the government had displayed courage in hiking it nominally over the last three years. The truth is that the price of a non-renewable source of energy will continue to escalate with time. The government in its bid to be populist has subsidized it all along, leading to a higher fiscal deficit. The fiscal deficit has meant a downgrade in India as an investment destination. Already, the government has a 72 hour ultimatum from Didi to roll back the price hike. Her argument is that it will have a cascading effect on all commodity prices.
I delve deeper into this myth to understand how much this fuel price hike impacts the Aam Aadmi that Mamta Banerjee stands for. By my estimate, with some help from a few truckers, I rationalize the cost of this price hike. A seventeen foot truck consumes about a liter of diesel to travel 7 kilometers. So, at erstwhile prices, the cost of fuel per kilometer for a truck was 5.76 per liter ( assuming Gurgaon prices until recently). Now, that would increase to almost 6.48 per kilometer. Sharp hike indeed.
Lets assume that a truck covers a distance of 300 kilometers to ferry vegetables from somewhere in Punjab to Delhi. Therefore, the net increase in fuel expense is Rs. 216 (6.48-5.76)*300. At normal load, the truck has a capacity of 75 quintals or 7500 kilograms.
The net increase per kilo of any commodity goes up by Rs 0.028 or 3 paise. Who can't afford it?
The other people who are horribly affected by the fuel price hike are poor mortals like me who own diesel guzzling SUV's. The government has been more than kind to subsidize my fuel bill and its about time that I start paying for myself. Hell, its still cheaper than driving on petrol!!!!
The other thing that the government did today was open up FDI in retail and aviation. I am not sure if they are good or bad moves. I leave this to the economists and the leaders to decide. I do follow the sensex and it seemed happy about the move. The rupee felt even happier. I think the Sensex knows best.
In all the good that seems to happening, the politicos are bickering, again. The allies want to fight the government more than the opposition. They are issuing statements and giving ultimatums. Will the government go down fighting?
If it does, I would be unhappy. For once, the government and the Prime Minister have shown courage. It reminds me of Lt. Colonel Frank Slade's legendary speech (Scent of a Woman), " he isn't selling anybody out to buy his future. That, my friends is called integrity. That's called courage. Now that's the stuff leaders should be made of"
A very well written article with good logic.
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