Words and figures

Union finance minister Nirmala Sitharaman was left with little option but to slash down prices of fuel and domestic LPG after Wholesale Price Index (WPI) touched a record high of 15.08 per cent in April on price rise across all items and Retail inflation too rising to a near eight-year high of 7.79 per cent in that month, remaining above the RBI’s inflation target for the fourth straight months. The finance minister announced on May 21, that the price of petrol will come down by Rs. 9.5, while the diesel will be cheaper by Rs. 7.The finance minister’s sharp cut in central excise duty on fuel prices amid surging inflation. Also, the finance minister announced that the government will give Rs. 200 per cylinder subsidy to Ujjwala Yojana beneficiaries for 12 cylinders in a year to help ease some of the burden arising from cooking gas rates rising to record levels. According to the government, it will stand to lose Rs. 1 lakh crore by taking the cut on central excise duties. The opposition Congress was quick to point out that the reduction made no real impact as the consumers still paid high prices. The opposition pointed out that petrol prices have increased by Rs. 10 per litre in the last 60 days and has been reduced by Rs.9.5 per litre. Again, diesel prices have increased by Rs.10 per litre in the last 60 days and has been reduced by Rs.7 per litre. Further Congress said LPG has been hiked to Rs.400 per cylinder during the past 18 months and therefore, offering subsidy of Rs.200 per cylinder for 12 months could not be for welfare of the people, who are still made to pay high cost.As finance minister Sitharaman has been presiding over a series of rollbacks either on budgets or on matters like small savings or interest rates and giving the opposition ample fuel to nail her for inability to read the writing on the wall. However the political compulsions for the rollbacks are not confined to fuel but also on the three controversial farm laws which triggered a massive nationwide protests and resulting in deaths of scores. The BJP government stuck its neck out for the laws but had to climb down after realising that a political peace deal was the better option than a costly conflict with agitating farmers. In the past after regular hikes, the Modi government blamed the Congress-led UPA for the crisis. In May 2014 when UPA left office and Modi took power, the cost of the Indian basket of crude oil stood at $113 per barrel. However, within six months by January 2015, the crude oil price fell to $50 per barrel. It also further crashed to $29 in January 2016. But the Modi government did not slash prices to help customers. Excise duty has risen sharply in eight years – from Rs 9.48 a litre in April 2014 to Rs 27.9 on petrol. Duty on diesel has risen from Rs 3.18 a litre to Rs 21.8. The central excise collection from petrol and diesel increased from Rs 1.78 lakh crore in FY20 to Rs 3.72 lakh crore in FY21. However, the government can no longer hide behind this blame-game anymore since the middle class have been feeling the impact on their economic conditions due to rising prices of commodities due to the government’s policy decisions.