Leftonomics*
The left parties want petrol hike to be reversed. Assume the government accedes to the demand. The government has to increase the subsidy on petrol. Who funds the subsidy? Taxes of course. Most of the tax revenue come from indirect taxes – central excise, customs and sales tax. Indirect taxes are by nature regressive – for a beedi bought, I pay the same tax as a guy who does not even work.
That is, when Bobben Kunjokka, a left party worker smokes Malabar beedi, he contributes the same extent to the subsidy to as any rich guy who smokes Malabar Beedi. And the beneficiary can be even a guy who fills gas for his Merc.
Okay, assume the government decides to print notes to make up for the deficit. This will again push up inflation which in turn will hurt the poor more than the rich.
So long as indirect taxes far exceeds direct taxes, so long as subsidy is given blindly for all, subsidy is a mosadi on the poor. There is no better way to keep richer and the poor poorer. And this is precisely what the left wants. Conversely, the left should be the only group in the history of mankind capable of protesting against what in effect are, their own philosophies.
* - this is based on my own understanding of economics.
July 20th, 2008 at 1:15 pm
:)!!! Nice post. Smart coining of the word!!!
July 20th, 2008 at 11:12 pm
left doesnt just talk about reducing the petrol prices…i read in rediff that the amount of exise and the duty levied on the fuel is almost 51 percent of the petrol cost….they want the govt to reduce that….actually this varies in state to state as you the price vary everywhere….i think thi can be done…will discuss about it sometime
July 21st, 2008 at 12:17 am
karthik
It does not solve the problem.
This would entail printing additional notes by the govt, which would stoke inflation. which again will hurt the poor.
irukara ella variyayum thookita 60,000 Crore madhiri innum neraya waiver kudukanum, infrastructure develop pannanum, school kattanum, hospital kattanum, ilavasa tv kudukanum, IIT kattanum idhellam yaar epdi panna poraanga?
I want to know what the left has proposed in terms of raising revenue for the exchequer.
I don’t think a guy of my earning ability and consumption needs subsidy in petrol. I dont think anybody who drives a personal car needs subsidy in petrol. the truth is i dont have a way to pay more even if i want to.
Oil companies did the right thing by promoting premium petrols which does not come under subsidy… but adhayum ennavo prachnai panni niruthitaanga…
I think the oil companies should issue prepaid petro cards. It should be freely available. The rate should be the actual rate of petrol - without subsidy. We can say private 100cc bikes and cars will get petrol only with petro cards. Mitsubishi lancer, ford ikon laam mileage 6 la irundhu 8 km varaikum kudukkum.. adhukellam eduku subsidy? if the guy wants to drive those then let him do it by paying the actual cost.
It can be made optional for bikes less than 50 cc (tvs 50 etc). epdi ECR la two wheelers ku toll illayo apdi
Only public utility - trucks, transport corpn buses, railways should get subsidised petrol.
Of course u can argue that idhelyum oozhal nadakkum etc. but basically ipdi kedaikara ovvoru paisavum govt. ku relief dhaan.
This is the gist of the ideas written by gyaani in vikatan or kumudam sometime back. To me this makes much more sense.
At a personal level, removing subsidy will entail an additional monthly outgo of 300 rupees for me. Sathyam oru padam extra parthom nu nenachutu poidalaam. But it can be very crucial for a guy who earns daily wages.
July 21st, 2008 at 10:01 am
malesh
thanks
i thought this should’ve been more common place though.
July 21st, 2008 at 11:18 am
PK, I fully agree. Its been my thought too. But my contention is that does the tax I pay get used fruitfully? esp I would not want to pay tax when my money goes for free colour TVs, aadambara alangaram for some politician’s visit etc. As you rightly said, subsidy should be given only for public transport vehicles and maybe smaller vehicles. Definitely not for people like us.
July 21st, 2008 at 12:28 pm
What i had in my mind… u jus spoke!! Introducing petro cards for private users is a good start!!! Only if our policy makers could listen to the people who voted them it would be lot more better…. till then we remain dumb spectators to the tamasha that goes on in the name of governance!!!
Most of the elected representatives sit in air conditioned cabins and formulate policies when they don’t even know what happens in the grass root level.
July 21st, 2008 at 9:43 pm
Ravi
I guess there should be at least a formal way in whch tax payers express their displeasure over the way the fund are channelised.
But this should not be used as an excuse for willful tax evasion.. ipdiyum neraya peru irukaanga
July 21st, 2008 at 9:46 pm
Malesh
thanks. Actually this ‘losing touch with reality’ would happen in designing any system. For e.g you and me think this petro card thing would work great. But may not necessarily be so. Adhuku dhaan there should be a way to monitor the situation and make changes as needed based on feedback in terms of actions..feedback in terms of what people do is much more reliable than what people say…
July 21st, 2008 at 10:49 pm
Malesh,
It is not that these politicians sitting in a/c cabins don’t know about the grass root realities. They don’t just care.
Actually many of these politicians will have very well experienced the grass roots and faced all the problems. This experience itself drives people to get into politics and indulge in corruption as a means for a ‘better life’.
Ultimately society only cares about what people become in terms of money/position and not really what corruption they indulge on the way up.
Prabu, this brings us to your recent post about Public vs Private !.
July 21st, 2008 at 10:54 pm
Coming back to the topic, the Left will survive only when problems abound.
When the common man doesn’t have any major problems and society is by large prosperous, it will be difficult for the Left to survive.
That’s why the Left create fresh problems real or imagined when existing ones disappear.
July 21st, 2008 at 11:48 pm
Mahesh
Makes sense
the ones in power.. they have no motivation to change and lot of incentives to keep things as is…
Same applies for left as well.. Only thing i need to give them credit for… i think.. they don’t indulge in mainstream corruption as the other leaders
Imagine MK or JJ holding 50 MPs and knowing that their support will alone keep the govt.
They would’ve demanded no less than 10 cabinet posts.
The vasool vettai would’ve been on completely different scale after that.
They stick to their policies only that the policies are self-defeating at best.
I know one mallu friend always said Cong govt in kerala is more corrupt but he would prefer that over the left anyday
Kasu kuduthalavadhu velai nadakkum ngra philosophy…
July 22nd, 2008 at 12:40 am
Mahesh:
I think there are 2 kinds of politician in today’s India. One kind is those who consider governing India as their birth right like the Gandhi’s and other families. And the other kind who as u say have come from the grass root level and seen the political system as a means of escapism. Though they were elected in the first place for something to be done.
July 22nd, 2008 at 5:06 am
PrabhuKarthik: I do agree with your proactive feedback system. With the current trend of things Indian government would do what it does best - ration!!! Having a ration system for petrol!!!
With the population explosion in India, i think everything will become rationed. from beaches to travel!!
July 22nd, 2008 at 9:26 pm
malesh
