While the Indian citizens are yet to come to terms with rising prices of basic and essential commodities, the increase in oil price comes as a double whammy.
In a period of declining global crude prices, BJP led NDA government has employed extractive taxes to mop up more revenue for itself and not passing on the benefits of lower prices to consumers. In the period from June 2014 till August 2017, India reported the highest percentage increase in diesel and petrol taxes. In contrast, most developed economies passed on the benefits of lower global oil prices to consumers. As per the latest reports, India’s petrol price stands as the costliest compared to South Asian and South East Asian countries.
Petroleum products are universal inputs and their impact is felt in every sector of the economy.
They enter into transport, irrigation, fertiliser, innumerable manufacturing processes and so on. It is impossible to avoid consuming petroleum, directly or indirectly. This is precisely why petroleum products are an easy source of tax revenue for governments. By not passing on the benefits of lower oil prices to consumers, the government has in effect imposed a highly regressive measure on its citizens at a time of an economic downturn.
This has further impacted the demand for consumer staples and further depressed the Indian economy. At the same time, when the agrarian distress is deepening, this continuous series of hikes in the price of diesel and petrol is bound to worsen the crisis. Diesel is the staple fuel used for drawing ground water from tube wells.
When major parts of the country are reeling under the impact of a drought and lack of drinking water, this hike will only worsen people’s livelihood, threatening their existence.
Instead of passing on lower oil prices to ease the burden on Indian society, the Modi government increased taxes to meet its fiscal deficit commitments and satisfy the demands of global investors.
Today, the BJP government is charging Rs 17.33 per litre on diesel and 21.48 on a litre of petrol as central excise duty– an increase of a whopping 120% and 380% respectively. The revenue collected by BJP government from excise duty on petrol and diesel has more than doubled in 2015-16 and more than tripled in 2016-17 over 2013-14.
They also helped the corporates to gain massive profits.
For example, Reliance Industries became India’s most profitable company when BJP came to power. Before this, it was Indian Oil. Last fiscal year also, RIL was the most profitable company posting a net Rs 29,901 crore profit in the financial year 2016-17. The petrochemicals segment of Reliance Industries saw a sharp increase of 43.7%.
It is crystal cut clear that the NDA government makes an India which is full of miseries and graveyard for the poor and fertile land for the corporates. Mr Modi’s appeasement of the corporate sector has actually drawn the whole country into chaos and turbulence.
Farmers are disgruntled with the way the NDA government is dealing with the agrarian issues. All achievements made in last several decades in the interest of Indian farmers have been undone in just three years of NDA rule.
The middle class, women and youth are frustrated and distressed due to the anti people policies of the government and they pose a big question; Who is this government working for?
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