Economy subscriptions thoughts

Relaxing For Reliance, Taxing The Mass.

The major policy decision of the newly formed Indian government is to free fuel prices from State.Oil minister Deora told reporters “It will go to cabinet.It will be discussed soon, within six weeks. The main beneficiary  is Reliance Industries, which will reopen its retail network.

As congress has formed the government on a strong base, away from the communist clutches , the market based fuel pricing will turn out a reality soon. The subsidies that were imposed to keep the price under control will be withdrawn.The wide fiscal deficit that arose out of artificial suppression of fuel price would be reduced , if the state delints itself from fixing prices.

Market driven pricing also will curb the use of fuel in India.These aspirations of the congress government will find a swift approval in Parliament. But the uproar and upheaval among the mass are hard to predict.

India , is a thickly populated country, with the majority depending on public transport. Once the subsidies are taken back , the fuel will surge high , resulting in the increase of fare in transport systems. The elections  are over, and the people have voted congress to power, with the desire that a stable federal government will bring growth and prosperity to the nation. This immediate decision of Manmohan singh  cabinet ,is a bot from the blue. The governance , instead of aiding the mass, is allowing a giant industrial power to renew its retail network, thus working significant profit.

The major oil companies . Indian oil, Bharat Petroleum, and Hindustan Petroleum corporation , stocks rose between 8-15%.Deora has assured that the he will see to it that fuel reach people at the right time and at the right price.

The sustenance of deregulation is  a big question. How long? and How well?.Crude oil is  making a forward move. When the price reach a high of 75$ , the plug in of deregulation will phase out. Kerosene prices are sold in  public retails with a huge subsidy , will shoot up , leading to a chaotic trend , as the majority depends on it . The extension of price hike in this sector . that is kerosene , will trigger a mass agitation. It looks like a political blunder.

Governance is a sure ,spectacular ,eventful ,sprightly affidavit. The essence of it lies not in haphazard  ,hurried provisions but in meticulous ,well planned, thorough thought out operations.Majority and strong base should not be misunderstood to be autocratic  and  dictatorial evidence.