THE GOVERNMENT OF INDIA swears in the name of the proverbial aam admi—the ordinary people. Its actions, however, not merely benefit the khaas admi—the select few—but also, in fact, contribute to the further immiseration of the underprivileged. This is aptly illustrated by the manner in which the second United Progressive Alliance (UPA) government suddenly decided on 25 June to hike the prices of petrol, diesel, kerosene and cooking gas, the most widely-used petroleum products in the country.
The country’s rulers and policymakers believe that it is their right to take away with one hand (through imposts) what they give with the other (subsidies). Even not-so-benevolent dictators believed that their right to tax rich citizens and provide doles to the poor would not just have to be seen as fair but also tilted in favour of the less well-off sections. What the Manmohan Singh regime has done is exactly the opposite, all in the name of ‘market-friendly’ economic reforms. Here’s why.
The day the Cabinet Committee on Economic Affairs decided to ‘decontrol’ petrol prices and increase the ‘controlled’ prices of the politically-sensitive and subsidised diesel, kerosene and liquefied petroleum gas (LPG, used mainly for cooking), the prime minister flew off to Toronto for the G20 meeting of heads-of-state. Considered a world-renowned economist, Manmohan Singh was reportedly heard with rapt attention as he spoke on correctives to the “fragile” state of the world economy and the “uneven” prospects of post-recession revival.