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Petro Shock: Anatomy of Petroleum Prices

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Petrol Price

Modi Govt may have been blaming the rising international crude prices for the current rise in the prices of Petrol and Diesel but anyone who is familiar with how prices move up and down in the international market would say that the government has only to blame itself because it failed to see the looming crisis while reaping rich dividends on account low crude prices.

Undoubtedly, the current surge in the prices of petrol and Diesel is on account of falling rupee against the US dollar and also the rising international crude prices but at the same time it is important to ask why the government failed to take any corrective measures in order to insulate the consumers from this unexpected fluctuations of weak Indian rupee.

It’s time to ask our Prime Minister as why he let his government rest smugly and claim efficient fiscal management while knowing all along that it was a result of cheaper oil prices worldwide? Why his government raise excise duties on petroleum products 12 times in last over 4 years and why it was kept out of the goods and services tax (GST)? After Modi became Prime Minister in May 2014, the excise duty on petrol has gone up by 211.7 % and on diesel by a staggering 443.06 %.

In 2014, the excise duty on Petrol for each litre was 9.20 Rs which increased to the present 19.48 Rs. Similarly, the excised duty on Diesel was 3.46 Rs in 2014 but after 4 years it climbed to a massive 15.33 Rs. If today, Modi Govt decides to bring the excise duty at par with 2014 level, the average drop in the prices of Petrol will be 10.42 Rs and 12 Rs for every litre of Diesel.

According to an estimate, the central Govt has collected a whopping Rs 11 lakh crore in tax from Petrol and Diesel in last 4 years between 2014-15 and 2018-19.BJP Govt came at the centre when the international crude was at all time low and Modi Govt not only took the advantage of the soft oil prices but on contrary it adopted a predatory policy on oil prices.

We are hearing various arguments from the leaders of ruling party as why suddenly the prices of petroleum products are touching the roof. Perhaps, the weirdest explanation came from a union minister who said that fuel prices in India are rising because of the high international crude prices .This is farthest from the truth and Prime Minister Modi is brazenly trying to fool people on this sensitive issue of petrol and diesel prices.

Let us have the reality check about the international crude prices. Since BJP came to power in 2014, the price of crude oil in the Indian basket fell from $109.05 per barrel in June 2014 to $46.56 per barrel in June 2017, a fall of almost 57%. Subsequently, it again it rose to $73.83 per barrel in June 2018.

This data comes from Petroleum Planning & Analysis Cell (PPAC) which falls under the Ministry of Petroleum and Natural Gas. Therefore, the prices have, as a matter of fact, dropped by about 32% since Modi government came to power. India still imports her 80% requirement of petroleum products through imports.

But there is more than meets the eye. The lies of spin-masters of Modi government is further exposed by the fact that international crude oil prices have little to do with what an average consumer pays for it. The prohibitively high taxes on Petrol and Diesel are the real villains which are something, government should control but strangely it has kept silence on these vital issues.

On contrary, it is hell bent on proving that all this will be ultimately beneficial to the people because Govt will have more fund at her disposal to pay for the welfare programmes. This could have been true, had the government have been spending the money for the benefit of the people.

But, if we see the track record of this government, we find that there have been cutbacks in almost all central welfare schemes over the years in the last 52 months with paucity of resources given as the main excuse. So, the argument of passing the benefit to people falls flat since the centre doesn’t seem to be redirecting the windfall from oil taxes to any public good.

Almost 46% of the retail price of petrol is made up of taxes charged by the Central as well as the state governments. If we look at the figures, in 2014-15, Modi government was making apprx Rs.1,22,200 crore from taxes that it levied on oil which by 2017-18, increased to more than double at Rs. 2,80,000 crore, a gigantic increase of 129%.

BJP Govt also seems to be passing the buck to the state Govt by saying that it is state governments who are actually responsible for the spiraling of oil prices. As far as state taxes are concerned, it has seen a 32% increase during the past four years. But if we calculate the total taxes collected by states, the figure comes out to be Rs.1, 86,000 crore on fuel which is nowhere near the princely amount of Rs.2, 80,000 crore, which is going to centre’s kitty.

Moreover, BJP is either on its own or in coalition with other parties is ruling government in 21 states; hence the onus to lower the exorbitantly high taxes is more on them than the opposition ruled states. Only yesterday, has Rajasthan, one of the BJP ruled state government has reduced the tax, but that is more because of political compulsion than anything else as the state is likely to have the Assembly elections in a few months.

While the common man is reeling under the pressure of high Petrol and Diesel prices, the corporate houses appears to have no such issues as the government seems to be more than generous with them. The big business houses, despite having a poor credit score have been indiscriminately given loans which they are now refusing to return.

It’s a strange coincidence that such bad loans given from public money collected through taxes have reached over Rs.11 lakh crore, the same amount which Modi Govt collected through tax on petroleum products in last 4 years. It raises a pertinent question-are the consumers of Petrol and Diesel in India paying for the profligacy of delinquent corporate houses.

If we see the pricing pattern of petroleum products like Petrol, Diesel and LPG, it appears as if the government has resorted to extortion towards the common people of this country in order to satisfy the greedy appetites of business houses. The government needs to understand the basic fact that these petroleum products are used not just by the rich or middle class people but also used for the irrigation purposes by the farmers, for transporting the essential commodities across the country and is directly connected to the prices of everyday products. These abnormally high prices of Petrol selling at almost Rs 90 for a litre and Diesel at Rs 77 per litre rob the people of their hard-earned money and no amount of lies by this government will assuage the anger of common man who is forced to undergo through this daylight robbery.

Disclaimer: These views are solely of the author.

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Modi’s BJP suffers defeat in Hindi heartland states

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Rahul Modi

Dec 11 :With good performance in assembly elections in three Hindi heartland states (Chattisgarh, Rajasthan and Madhya Pradesh), Rahul Gandhi, who took over the Congress reins as party President on December 16 last year, has proved the opponent BJP’s Modi that he has the power to defeat the political force of BJP- RSS that seek to divide the nation on communal lines.

But BJP suffered its worst defeat in these elections and Narendra Modi with 56-inch chest, who changed the very nature of politics and campaigning style after coming into power four years ago by making tall economic promises and showcasing Hindu nationalist views, failed to impress voters this time. He promised to give Rs 15 Lakh to very Indian ,including creating one million jobs a month.

The Assembly results of five states is an indication that Modi’s brand is losing its luster.

Modi used every medium of technology from social networking sites, campaigning and even right wing organisations to scrutinize each and every speech and action of Congress president Rahul Gandhi and trying to build a fake propaganda of rejection but the fifth generation of Gandhi family leading the grand old party has successfully snatched two states – Chhattisgarh and Rajasthan – from the Modi-led BJP,while Congress is locked in a close fight in Madhya Pradesh in the semi-final test before the 2019 national election.

Rahul Gandhi hit the right chord by targeting Modi government on social and governance issues of farmers plight, youth unemployment,insecurity among minorities,corruption in Rafale deal, destruction and misuse of constitutional institutions like RBI, investigative agencies and educational institutions.This is quite evident from the latest development by the sudden resignation of the RBI Governor Urjit Patel.

This election has reflected the mood of the nation thus rejecting the element of fundamentalism, policy of divide and rule, giving importance to cow slaughter more than human lives and thus encouraging lynching by giving a free hand to his cabinet ministers to honour the culprits.

Rahul Gandhi addressed a press conference said that Prime Minister Narendra Modi had “failed to listen to the heartbeat of the nation.” Gandhi also said that “I was telling my mother that the absolute best thing for me was the 2014 election. I learnt a lot from that election. I learnt that the most important thing is humility,” said the 48-year-old Congress chief, who took a lot of the blame for the party’s non-stop election disasters. “Frankly Narendra Modi taught me the lesson- what not to do,” he added.

Congress makes an impressive comeback in the Chhattisgarh Assembly Election Result 2018 and is all set to end the 15-years rule of Raman Singh. Congress emerged as the winner in Rajasthan, Sachin Pilot and Ashok Gehlot are leading the talks for government formation in the state.

Madhya Pradesh Congress president Kamal Nath and party’s campaign committee chief Jyotiraditya Scindia are personally leading the effort to gather support from BSP and SP. In fact, Kamal Nath was believed to be in touch with BSP supremo Mayawati and SP chief Akhilesh Yadav.

Although he has been successful in extraditing Michel but Modi government failed to prevent economic offenders escaping from India with the taxpayers’money under their watch.

Rahul, who aggressively campaigned in the states by implementing his strategy of asking his party workers to engage in door to door campaigning and highlighting the failures of the current government and he himself addressed 82 rallies in poll bound states and religiously targeted Prime Minister Narendra Modi and the BJP on the Rafale deal, the Nirav Modi scam and other such topics that many said had no mass connect. He tore into PM Modi and controversially said, in rally after rally, “Chowkidar chor hain”.His speeches apparently found resonance with
the voters but he also focused on optics.

BJP used every opportunity to mock the Congress president since the party was reduced to 44 seats in the 2014 Lok Sabha elections.

Now the time for the BJP is to introspect but the Saffron party hurriedly blamed the state chief ministers for the party’s defeat and said that “Modi is still popular among the masses and the election results do not reflect Central government policies led by Modi.”

Modi’s popularity is declining steadily and it all started with demonetisation which led to the closure of small and medium businesses and the collapse of small traders industry; faulty implementation of GST that jolted people’s confidence in him, steady steep hike in fuel prices,rampant corruption and high inflation.

Modi’s allies are concerned after seeing the results in cow belt, where the BJP’s domination has ended .Modi failed to deliver on the commitments he made during 2014 campaigning which backfired in these election results.

Blog : By Arti Bali,
arti

(Senior Journalist)

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Universities should consult industry on designing courses to make students employable

Such initiatives hold the key to driving India’s innovative capacity forward and making the country more competitive.

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Enhancing employability

Even though the idea of globalisation has come under fire in the last few years, with increasing levels of discontentment over inequity in the distribution of gains, the benefits that the world economies have derived from it are often overlooked.

One unmistakable benefit has been the transfer of productivity-enhancing technology between nations and diffusion of innovation worldwide. The International Monetary Fund’s World Economic Outlook released in April this year also pointed out that globalisation has given a significant boost to the diffusion of knowledge and technology across the world through free trade, higher foreign direct investment and the international use of patents and copyrights.

Innovation has become the key to gaining greater market share and more and more countries are shifting their policy focus on building their innovative capacities to strengthen the competitiveness of their economies. Competitiveness is defined as “the ability of firms to compete, grow and be profitable in the long run”. Studies find an unequivocal link between innovative capacity and competitiveness of nations and regions. In fact, it is almost next to impossible for businesses to become competitive without innovating in its products and operations.

With the world innovating at breakneck speed, no country wants to be left in the lurch. Most significantly, China has laid out a plan to become an “innovative nation” by 2020 and an “international innovation leader” by 2030 in its current Five-Year Plan. Even countries like Saudi Arabia that have historically been heavily resource-dependent are making a conscious move towards higher innovation. These countries are beginning to recognise the fact that building a competitive advantage based on factor endowments (cheap labour in case of China and oil reserves for Saudi Arabia) cannot be sustained over the long run. A transition to a knowledge-based economy is imperative.

India can ill-afford to find itself lagging on the curve. The country had missed out on the first industrial revolution on account of being at the receiving end of colonial history. No other phase of innovation in history has transformed industry to such an extent. Only the digital revolution at the end of the 20th century came close. It is, therefore, a rare and opportune time for India to accelerate its development process and move into the next stage of growth by focusing on strategies to foster innovative capacity.

In recognition of the urgency to act, a roundtable on “Innovation for Prosperity” was organized by NITI Aayog and the Institute for Competitiveness last week to draw actionable policy recommendations for NITI Aayog to work upon to improve India’s innovation capacity. One of the most pertinent issues raised at the roundtable was the issue of industry-academia linkage in the Indian education system.

Around the world, universities are seen as hubs of innovation where experts from varied fields come together to share their ideas for developing new technologies, systems and processes. Such innovation originating from universities usually attracts huge demand from industry. This results in diversified products and market development, which leads to the nation gaining a competitive edge in the world markets.

Such industry-academia linkages are missing in the Indian economy. Universities are meant to play a dual role of knowledge creation and knowledge transfer. But the latter is found wanting in the Indian context. The problem resides in the abysmal quality of the country’s education system that focuses more on quantity than quality from a very early stage. For instance, the focus is always on the number of hours taught rather than the quality of education imparted in those hours.

At every level of education, students are never encouraged to think. Rote-learning is encouraged through an incessant focus on marks, which leaves no scope for thinking or innovation. Further, higher education is mostly outdated and hardly industry-oriented. Therefore, the human capital in India is barely equipped to innovate for industry. Another factor that hinders any industry-academia linkage is an utter lack of clarity on who owns the IP for collaborative innovation. Until these problems persist, any collaboration between industry and academia will be difficult to achieve.

One way to move away from the status quo is to encourage universities to consult industry while designing course curricula so that the graduates are more employable and innovative. The government can also play an enabling role in facilitating higher collaboration. It can provide tax incentives or subsidise setting up of research infrastructure in universities that can be used for industrial innovation. The government could also push for higher academic exchanges by funding the transaction costs involved in the process, which can particularly help in better understanding of what industry requires from academia.

Such initiatives hold the key to driving India’s innovative capacity forward and making the country more competitive.

(Amit Kapoor is chair, Institute for Competitiveness. The views expressed are personal. He can be contacted at [email protected] and tweets @kautiliya. Chirag Yadav, senior researcher, Institute for Competitiveness, has contributed to the article)

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‘Jallianwala Bagh massacre was preceded by reign of terror by the British’

“The massacre on 13 April was part of a policy of oppression unleashed by O’Dwyer against the frequent ‘hartals’ (strikes) or the ‘Satyagraha Movement’ (launched by Mohandas Karamchand Gandhi)

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Jallianwala Bagh Massacre
Jallianwala Bagh, 1919: The Real Story : (Flickr)

Chandigarh, Dec 11 : As the country gears up to observe the 100th anniversary of the Jallianwala Bagh massacre of innocent, unarmed Indians by ruthless British forces, the events before and after the April 13, 1919, killing of hundreds clearly indicate that the British rulers of that time were unnerved by the unrest in Punjab in general and Amritsar in particular, which led them to do something which could “teach a lesson” to the Indians.

“Though Brigadier General Reginald Dyer (who ordered his troops to fire on people who had gathered at the Jallianwala Bagh on the fateful day and killed hundreds) was blamed for the action, there is hardly any documented evidence to show how he landed in Amritsar on that day as he was posted in Jalandhar (earlier Jullundur),” author and columnist Kishwar Desai told IANS in an interview here.

Desai, who has penned a book “Jallianwala Bagh, 1919: The Real Story” recently, said that her extensive research on the happenings around the massacre revealed that the British rulers were quite unnerved by the unrest in Punjab and Amritsar.

“Prior to the killings at Jallianwala Bagh, there had been signs of increasing unrest in Punjab. These signs were being interpreted as sedition, even though causes of the unrest were varied. Indeed, it is impossible to understand what happened on 13 April 1919, without an examination of the barbarism unleashed in Punjab under the regime of the then Lieutenant Governor Sir Michael O’Dwyer to suppress the so-called rebellion,” Desai, who is the chair of The Arts and Cultural Heritage Trust that set up the world’s first Partition Museum at Amritsar’s Town Hall, points out in her book.

The author said that the idea to write this book and to bring out “some facets which had not been researched in detail so far” came after she chanced upon a photograph of the burnt-down Town Hall building of Amritsar. This happened in April 1919.

Further investigation and research, according to Desai, led to more evidence of the British atrocities on Indian subjects just before the Jallianwala Bagh incident and the violence that erupted in Amritsar on April 10 in which many people, including five Europeans, were killed. Properties, including the Town Hall, were targeted to protest against the British atrocities.

Disputing the commonly held narrative that the people who had gathered at the Bagh on the fateful day for an anti-Rowlatt Act meeting were outsiders who had come to Amritsar for the Baisakhi festival, Desai points out that the meeting was attended mostly by local residents of Amritsar and no more than 25 per cent of them were from outside.

“And it is very likely that the massacre was a carefully planned one, not spontaneous one as has been often made out. In all likelihood, no women were present,” Desai states in the book, adding that O’Dwyer, who was nearing retirement at that time, and others in power, were upset over the emerging importance of Punjab in the freedom struggle and retaliated with a reign of terror where people were whipped in public, bombed, incarcerated, forced to crawl, starved, beaten, caged and even executed.

“The massacre on 13 April was part of a policy of oppression unleashed by O’Dwyer against the frequent ‘hartals’ (strikes) or the ‘Satyagraha Movement’ (launched by Mohandas Karamchand Gandhi)… in fact, the civil administration of Punjab had already declared Amritsar a war zone (around April 11) and regarded the residents as their enemies,” Desai points out in the book.

Dyer, who had arrived in Amritsar from Jullundur on the evening of April 11, had ordered his troops to fire on the gathering inside Jallianwala Bagh on the evening of April 13, 1919. The official death figure was put at 379 while nearly 1,200 were injured. The death toll is often disputed, with claims (Indian National Congress Report) that over 1,000 innocent people were killed.

“Not a very well-known entity” when he arrived in Amritsar, Dyer had a “fairly humdrum career” till he “hit immortality as a mass murderer”, the new book says.

(Jaideep Sarin can be reached at [email protected])

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