India’s fuel price woes are a governance failure

Of all the things that one can accuse the current Indian government of, communicating its achievements, however small or significant as they might be, is not one. This is borne out by information provided by the government’s own official arm, the DAVP, which confirms that in the first three years of its regime, the current government spent an average of Rs 3.21 crores per day on publicity, a sharp jump over the Rs 1.21 crores per day the previous UPA government averaged during its own two terms. Which brings us to the fact here. The wide angst over high prices is essentially a governance failure.

The fuel taxes imposed since 2014, have ensured all time high pump prices, even as crude oil has barely touched $80 per barrel. With possibly enough momentum to go still higher.  Leaving no one with any idea of what to expect should prices march to previous highs of $140 seen in 2013.

Right from the time, the government signed the Paris Accord in 2016, where it effectively committed to a 1/3rd level of existing emissions ‘intensity’ of 2005 levels by the year   2030, the government committed to a slew of measures to reach these targets. A ‘carbon tax’ or a tax on precisely the fuels that have become so painful now besides doubling he cess on coal production was cited as one of the steps already taken. Unfortunately, someone forgot to tell the consumers that. It’s the sort of ‘government knows best’ attitude that has been the bane of governance forever in India.

In fact, while visible action (demonetization and GST) and the communication around ‘collecting’ taxes have been highest, rather than ‘spending’ them wisely. For the ordinary citizen, it has almost become a travesty today. Strange as it might sound, a huge if not most parts of the extra windfall from our ‘carbon’ taxes have actually been spent as fuel subsidies again if one considers the scale and size of the popular Ujjwala (subsidised cooking gas) and the Saubhagya Scheme (Free electricity for the poor). Just the ‘game changing’ Ujjwala scheme, which seeks to provide 50 million poor families with a gas cylinder connection by 2019, in time for the next general elections, needs massive support to provide refills at a lower cost to be truly successful. For its own reasons, the government has chosen not to highlight either the environmental benefits of gas usage by these citizens or the same logic for the free electricity plans.

That has an unfortunate consequence. Instead of even a basic familiarity with the state of the environment today,  India’s citizens are left to discover the impact with each natural crisis that hits, be it drying rivers, erratic rainfall, higher pollution health hazards and many more.

Is this because the government also has a ‘pact’ with industry to allow it leeway to grow without too many environmental roadblocks for at least some period? Going by the record of the past 4 years, when every move has been about ‘speeding’ up clearances, it would appear so. While taking away rent seeking permissions is welcome, for it is no one’s case that India needs its industrial growth really badly, the fact is that the situation like the one being witnessed at Sterlite’s Copper Smelter in Tamil Nadu is a poor advertisement for the state’s concern for the environment or its citizens well being.

It’s time for the government to come clean, make sustainability a governance plank matched by action and our current situation transparent, and invite higher citizen participation to find a way out. The current methods are rife with contradictions and by leaving execution at the hands of the government machinery, inefficient by default.  If actions speak louder than words, then visible action in the form of immediate cutbacks on government expenditure on fuel ( a minimum of 20%), massive consumers like the railways, a higher thrust on renewables where investments have tripled admittedly, but much more needs to be done, and finally a concerted focus on public transport infra beyond the ‘prestige’ metro rail projects would be the first steps one would expect.

By not doing enough on the environment and sustainability front in the name of which fuel taxes have been collected, we are letting ourselves down for a much more longer period than just the next elections in 2019.


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Prasanna Singh

Prasanna Singh is the founder at IamRenew

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