The non-discretionary spending on which depends the meeting of essentials has been hit as the spending on such needs like that of fuels has gone up by 75 percent in June, 2021, from 62 percent in March 2021. People are finding it almost impossible to meet their basic essential needs, as along with the prices rising, there is added the medical spending too what with third wave awaiting its turn. The monthly budget has gone into pieces as the entire country suffers the Pandemic lashes. Deprivations and fatal tragedies have pushed every section of people on the edge. The brittle psychic balance is giving way as there is no available explanation for the knots that have been created in the economic and social context.
The reply, as to the question about the huge incremental revenues the Centre receives from petrol and diesel, contains that resources are meant to fund infrastructure and other development projects. As per a reply by the government in the Lok Sabha in March, there was a raise by Centre of Rs 72,500 crore via excise duty on petrol and diesel in 2014-15. This increased by over 300 percent to over Rs 3 lakh crore in 2020-21. It does not stop here. The hike in Centre’s oil tax revenues could be even higher this fiscal, as the current price trends have been showing. So while there is over 300 per cent increase in tax revenues from petrol and diesel, the average annual growth in capital expenditure by the Centre has been less than 10 percent since 2014-15, after the Modi government came to power.
The first two waves of Pandemic have left the economy to scratches. Now the third wave is getting in with a tragic gift of further bitter experiences. There are chances of even greater price hike of fuel with its consequent results. The possibilities are dim for any recovery as the Centre is already prepared with its justifications for even higher fuel price hikes, citing the need to fund infrastructure development.
Meanwhile, there are reports pouring in about a decline of 40 percent in the overall public spending on infrastructure projects in the April-June quarter. It is more compared to January-March. Despite the fact that there was no countrywide lockdown and the centre has claimed that it has kept going uninterrupted its big construction projects, among them is the Central Vista too.
The contradictions remain unresolved, the gaps are glaringly visible and yet there is the all time high drop in public infrastructure funding. And this is taking place when there is the tax revenues from oil at all-time high. There has to be a white paper where the Centre has to explain how the 300 percent plus increase in fuel tax revenues accommodates the actual increase in spending on infrastructure projects.
With the cutting down of wages to less than halves, after toiling for more than ten hours, that is if jobs are available, the hassled and hapless masses are paying hundred rupees for every litre that they spend on petrol and diesel. The tax payer with a real income never enough for even satisfying the hunger of the family, has every right to demand the answer as to how the Centre proposes to spend over Rs 3.5 lakh crore, which it is likely to collect as oil taxes in 2021-22. As the end of this fiscal year is not very far, the accounts must be made clear.
It may be pointed out here that in the petrol and diesel taxes collected by the Centre, almost 65 percent is in the form of cess, and there is no sharing of this booty with the states.
In the Centre’s oil taxes and infrastructure expenditure, private investments are still insignificant. This adds more significance to the white paper on the link between the Centre’s oil taxes and infrastructure expenditure. It is only the public spending that can drive growth and employment. In addition, at these critical moments, when the entire economy is facing disaster, the Centre has been claiming that the infrastructure spending is used as a primary strategy to boost employment, income and demand, and not the handing out of cash stimulus to the suffering masses. And it is this very fact that brings to light the tax payers’ right to know how oil taxes, the single largest source of revenue for the Centre, are used in actual terms. If we are living with democratic values, we must have full transparency on these accounts. (IPA Service)
STEEP RISE IN FUEL PRICES DURING PANDEMIC HAS HIT THE POOR AND JOBLESS MOST
MODI GOVT MUST EXPLAIN HOW THE HUGE ADDITIONAL REVENUE HAS BEEN USED
Krishna Jha - 2021-07-23 11:04
The cost of living for people from all economic strata except the favoured few gets shockingly high with every rise in petrol and diesel prices. According to SBI findings, there is a 50 basis points increase in consumer price inflation whenever the hike comes. The latest research by SBI Economic wrap has brought to light that falling standards of living and the way the resources are spent in meeting the basic needs have been caused by altered high prices of fuels. In such conditions not only the non basic spending has been hit but the spending for essentials has also been facing drastic cuts. It is the result of exorbitant rise in the fuel prices that had affected the life style of consumers.