Amidst rising prices in the international market, the UPA's Manmohan government issued oil bonds worth approximately ₹1.5 lakh crore to provide affordable fuel to consumers. This measure ensured that, during a period of high inflation, the common citizen would not have to directly bear the burden of increased oil prices. This decision also served a secondary objective: it ensured that the government which had already become unpopular due to various scandals would not have to face further political difficulties. In essence, the Manmohan government chose to shift the burden onto the future in order to ease the present.
To repay the very debt incurred through these oil bonds issued by the UPA government to oil companies and which had since ballooned to approximately ₹3.5 lakh crore the Modi government continued to sell fuel to the same consumers at elevated prices for nearly seven to eight consecutive years, even when international oil prices had declined. The Modi government faced significant criticism for this approach. Prime Minister Narendra Modi himself faced personal allegations of favoring oil companies.
Be that as it may.
Today, amidst uncertainty surrounding oil and other fuels and with an energy crisis looming large the government has reduced the excise duty on petrol from ₹13 to ₹3 per liter. Furthermore, it has completely waived the excise duty on diesel a fuel critical for both agriculture and industry to ensure that neither do refiners suffer losses due to rising international prices, nor do the increased costs of fuel translate into added inflationary distress for the common consumer.
Clearly, the Modi government's strategy collecting higher excise duties during "good times" to clear debts, and easing the burden on the common citizen during "hard times" is a decision taken in the best interest of both the economy and the general public. And, indeed, it is a justifiable approach.
What is your opinion?
To repay the very debt incurred through these oil bonds issued by the UPA government to oil companies and which had since ballooned to approximately ₹3.5 lakh crore the Modi government continued to sell fuel to the same consumers at elevated prices for nearly seven to eight consecutive years, even when international oil prices had declined. The Modi government faced significant criticism for this approach. Prime Minister Narendra Modi himself faced personal allegations of favoring oil companies.
Be that as it may.
Today, amidst uncertainty surrounding oil and other fuels and with an energy crisis looming large the government has reduced the excise duty on petrol from ₹13 to ₹3 per liter. Furthermore, it has completely waived the excise duty on diesel a fuel critical for both agriculture and industry to ensure that neither do refiners suffer losses due to rising international prices, nor do the increased costs of fuel translate into added inflationary distress for the common consumer.
Clearly, the Modi government's strategy collecting higher excise duties during "good times" to clear debts, and easing the burden on the common citizen during "hard times" is a decision taken in the best interest of both the economy and the general public. And, indeed, it is a justifiable approach.
What is your opinion?
Rajeev Upadhyay
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