Like Rahul Gandhi, I too wanted minimum 12 subsidized LPG cylinders during UPA regime, but I happily gave up entire subsidy when Modiji made a call for it. It may look strange to many but there were more than one crore people like me who voluntarily gave up this subsidy.
Why? Because people could see sincerity and commitment in the PM Modi's appeal and had faith that the subsidy that they surrendered will actually be utilised for the benefit for the masses.
Honestly speaking, I was also one of those who would demand reduction in tax on petroleum products not only because I wanted less burden on my pocket but also because I believed that the prices of petroleum products had a spiralling effect on prices of all commodities and services causing inflation.
Have the principles of economics changed that I have not made a single post during the current rise in prices of petroleum products demanding reduction in taxes? No. The principles do not change but the circumstances have changed.
No economy can run without taxes. A country is managed by its Govt by the taxes collected from its citizens.
But taxes pinch when we see them being pocketed by a few in the system.
You feel proud to pay taxes when you find them being used for the benefit of the overall good of the country.
During UPA misrule, which has gone into history as a corrupt regime wherein public money was looted by the rulers themselves through scams in almost every field, public was sure that while they were being taxed heavily, the money collected from them was not put to the use it was meant for.
Modi came in 2014 and the same society which wanted more subsidies and not to pay taxes started behaving differently for the simple reason that people had faith in Modi. The good thing is that he has not disappointed them.
But what about the spiralling effect on inflation?
Petroleum price is not the only factor behind inflation though it does impact adversely when inflation is otherwise there in the economy. Thanks to demonetisation and better fiscal control, inflation has been under control during NDA regime and we find it under control despite ever increasing petroleum prices due to falling rupee and increasing cost of procurement. Speaking in common man's language, due to lower prices of everyday needs, one does not actually feel pained by higher petroleum prices compared with the UPA regime when petrol prices were rising along with the prices of all essential commodities. Hence, it is not a cause of concern for the economy though the middle class does feel its impact on its monthly budget, the impact being precipitated by the low prices the market had seen during the initial years of Modi's regime.
It is politically not prudent for BJP not to take steps to contain the prices of petroleum products in view of the coming elections.
But, perhaps, BJP values the success of its social welfare programs more than votes of the middle class. Despite huge success of Pradhan Mantri Awas Yojana, Pradhan Mantri Jan-Dhan Yojana (PMJDY), Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Pradhan Mantri Ujjwala Yojana (PMUY), Pradhan Mantri Sahaj Bijli Har Ghar Yojana –“Saubhagya” and Swachh Bharat Mission (SBM) etc. it is yet to be seen if this success can be converted into votes while BJP is likely to see some of its base in the middle class being eroded for this single factor.
But, the long term success of these schemes needs NDA to come back. It is in the interest of social welfare that the Govt takes some steps to get the consumer prices of petroleum lowered by reducing taxes on them.
It will be interesting to see if and when the GST Council brings petroleum products under the regime of GST thus reducing tax on them.
Why? Because people could see sincerity and commitment in the PM Modi's appeal and had faith that the subsidy that they surrendered will actually be utilised for the benefit for the masses.
Honestly speaking, I was also one of those who would demand reduction in tax on petroleum products not only because I wanted less burden on my pocket but also because I believed that the prices of petroleum products had a spiralling effect on prices of all commodities and services causing inflation.
Have the principles of economics changed that I have not made a single post during the current rise in prices of petroleum products demanding reduction in taxes? No. The principles do not change but the circumstances have changed.
No economy can run without taxes. A country is managed by its Govt by the taxes collected from its citizens.
But taxes pinch when we see them being pocketed by a few in the system.
You feel proud to pay taxes when you find them being used for the benefit of the overall good of the country.
During UPA misrule, which has gone into history as a corrupt regime wherein public money was looted by the rulers themselves through scams in almost every field, public was sure that while they were being taxed heavily, the money collected from them was not put to the use it was meant for.
Modi came in 2014 and the same society which wanted more subsidies and not to pay taxes started behaving differently for the simple reason that people had faith in Modi. The good thing is that he has not disappointed them.
But what about the spiralling effect on inflation?
Petroleum price is not the only factor behind inflation though it does impact adversely when inflation is otherwise there in the economy. Thanks to demonetisation and better fiscal control, inflation has been under control during NDA regime and we find it under control despite ever increasing petroleum prices due to falling rupee and increasing cost of procurement. Speaking in common man's language, due to lower prices of everyday needs, one does not actually feel pained by higher petroleum prices compared with the UPA regime when petrol prices were rising along with the prices of all essential commodities. Hence, it is not a cause of concern for the economy though the middle class does feel its impact on its monthly budget, the impact being precipitated by the low prices the market had seen during the initial years of Modi's regime.
It is politically not prudent for BJP not to take steps to contain the prices of petroleum products in view of the coming elections.
But, perhaps, BJP values the success of its social welfare programs more than votes of the middle class. Despite huge success of Pradhan Mantri Awas Yojana, Pradhan Mantri Jan-Dhan Yojana (PMJDY), Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Pradhan Mantri Ujjwala Yojana (PMUY), Pradhan Mantri Sahaj Bijli Har Ghar Yojana –“Saubhagya” and Swachh Bharat Mission (SBM) etc. it is yet to be seen if this success can be converted into votes while BJP is likely to see some of its base in the middle class being eroded for this single factor.
But, the long term success of these schemes needs NDA to come back. It is in the interest of social welfare that the Govt takes some steps to get the consumer prices of petroleum lowered by reducing taxes on them.
It will be interesting to see if and when the GST Council brings petroleum products under the regime of GST thus reducing tax on them.
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