Tuesday, June 10, 2008

Aam Aadmi Aur Garib???

The Union Government of India has decided to raise selling price of petroleum based products including LPG which has attracted public wrath and flak from all quarters in the country. Be it political parties from the opposition or UPAs own allies (like CPI, RJD etc) The Congress led govt at the centre is under tremendous ‘domestic political’ and ‘international economic’ pressure. Uncertain fluctuations and weakening of US Dollar against crude and bullion accompanied by continuous rising in the rate of unemployment in the USA (latest 5.5%) for last five months is perhaps driving the sole superpower and the whole global economic order into a situation like economic depression (?) .
Interestingly, it is not only the Indian Govt which has taken a decision to raise price (cut Oil Pool subsidy) but neighbouring Asian states like Malaysia, Taiwan, Indonesia and Pakistan has also taken similar steps in the recent past.
On the domestic front , opposition political parties and( some Civil Society Groups) are leaving to stone unturned to take a political mileage out of this situation by flaring emotions of common masses in the name of “Aam Aadmi” and “Garib” ----------- both of the categories are themselves unclear. And some actors in media are making a good business by running rhetoric laden panic mills.
Below are some serious issues of Public Policy both at the domestic and international levels which need Public opinions and viewpoints.
- What options does Govt really have to contain inflation in short run? Money market interventions seem to be very bleak when the Reserve Bank of India (RBI) Repo rate is already 7.75% and CRR has touched 8.25%. The increased interest rates have hampered the growth rate of manufacturing sector in advance (from 14% to 3% p.a). Devaluation of rupee can be other option but dollar itself is not fixed and what about international trade effects in such a scenario?
- Next very pertinent question is whether the Govt should really shield oil pool (and other sectors) by subsidy? Is it not a high time now for civil society, Public policy think tanks and political leadership to initiate deliberations and discussions across the country on a draft frame work and a final Nation Policy on Subsidies which constitute whopping 8% of national GDP?
- Issues pertinent to supply side bottlenecks which have played a key role in fuelling inflation to current 8.24%. More precisely in farm sector , to prevent a “bubble formation” .
- Role and responsibilities of an independent media in forming Public opinion and affecting Public policies?
- Alternative sources of energy and energy security, to be specific Nuclear energy and Indo-US Nuclear deal in wake of recent international developments like possibility of Iran-Israel war and further spiralling of oil prices (upto USD 200/Barrel). Since energy (Crude oil) is traded from some of the most politically sensitive and unstable regions of the world like the middle east (Iran, Quwait,Iran etc) and Africa(Nigeria, Angola etc). There needs a long term energy security plan for fuelling Indian economy.
With some of these pointers I leave the discussion open for all friends. Please share your points of view on the Issue.

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