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Hiking Spree of the Govt.: Reasons and Effects on Common Man?

Posted on June 30, 2010 in Society

Sango Bidani:

What’s happened to our governments? They have gone on a hiking spree it seems! The Delhi Government started this hiking madness by deciding to raise the water rates, followed by removing subsidy on electricity, followed by increase in property rates and to drive the final nail in the coffin it also decided to raise the auto and taxi rates by a huge amount of Rs.9 and Rs.5 respectively. As if this was not enough the Central Government decided to hike petroleum product prices across the board by huge increases. Petrol prices increased by Rs.3.5 per litre, Diesel prices by Rs.2 per litre, LPG prices by Rs.35 per cylinder, Kerosene prices by Rs.3 per litre and CNG which was already increased by Rs. 5.5 per litre. So the Governments have not spared anything that the common man needs to survive on, what with the already ridiculous situation of food inflation which is above 10%, to be precise 10.13%.

So what are the official reasons for hiking these rates and what impact will this have on the common man who is already under the stress of high food inflation when the country is just recovering from a slow down of sorts, which means that the employment opportunities have gone down, thus leading to unemployment of the youth of the country. It is ridiculous to know that the situation in banks is so bad that students who are supposed to gain work experience and who are supposed to provide training in professional courses like B.Com, B.B.A etc. are inviting students from these courses to help sell their insurance policies! What are the reasons for this hiking madness of the government? And what is going to be its impact on the common man, especially the poor who drive autos and taxis in our country?

The reason given by the government for hiking the petrol and diesel prices across the board is to reduce the fiscal deficit and this increase will lead to generation of more revenue for the government. While the first argument can still be understood, the second reason really fails to appeal to logic. In the recently concluded 3G spectrum auctions, the government declared that they got bids in excess of what they had expected and that this would mean that this excess can easily be added to the extra revenue for the government. And besides, the income tax department this time as well as last time collected huge IT returns and all these returns go to the government revenue list. So, one fails to understand that why did the government give generating extra revenue through rising petroleum prices as a reason for increasing these prices. Does this mean that there is a revenue crunch in our government bursers? Surely there is more to this reason than what meets the eye. Another thing that might puzzle the common man is what was the need to give full power to Oil Companies to increase the prices as much as they feel is necessary? Why was Government control removed suddenly? Surely this is a question to which the government must give a clear answer. And as if this was not enough, the PM yesterday said that diesel prices will also be out of government control bounds. What the reasons for these decisions? One fails to understand!

Yet another thing that baffles the mind is why such a great hike in LPG prices. As it is the LPG Cylinder was expensively priced at Rs.310 and now it will cost Rs.345. What kind of impact will this decision of the government have on the common man? Will this mean that restaurants will also make the food they sell expensive since they use many cylinders to make the large quantity of food that they do make? And what will happen to the people who entertain guests at their home and have to cook food in bulk? Will this mean that they will serve less food to the guests to conserve gas? It might just hold true and it might also turn out that restaurants will increase the rates to keep their financial burden in check.

What was the reason for raising CNG prices so much? Here I would like to point out that two days ago when I was traveling back from my previous school to Pragati Maidan Metro Station I asked the auto driver how much has the rate increased for CNG and what impact has it had on the earnings that he takes home and he gave me a shock with his reply. He said that the CNG rates have gone up by Rs 5.5 per litre and that since he runs a hired auto therefore he has to pay quite a lot to the person from whom he has hired his vehicle and when he returns home he is left with just Rs.600 as compared with Rs.1000 when the prices were lower. You can imagine how seriously this rise has affected him. This means that daily he is losing Rs 400 due to this jump in prices. And with the food inflation situation being as hopeless as it is right now, Rs 600 is just about enough for his family which has 4 children and his wife along with him.

Now let’s look at the hike in property rates that the Delhi Government introduced on the 17th of June 2010. According to the new revised rates, the houses which were already out of bounds for the common man have gone even further out of bounds due to this increase in property rates. They have revised the circle rates and according to that, the lowest circle rate now is Rs.9000 per sq meter and the highest circle rate is Rs 1,25,000 per sq meter. This means that if you want to build an independent residential house then you will have to shell out Rs 1,23, 69, 920 plus stamp duty at 8% of minimum value of Rs 1,23, 69, 920 which comes out to be 9,89, 594 Rs. So all in all you will have to pay Rs 1,33, 59, 514 to build an independent residential house. Now how many people have this kind of money that they will be able to build an independent residential house! In case you want to purchase a flat in a CGHS building having more than 4 stories (including lift) then the minimum value is 18 lakhs plus stamp duty of 1,44,000, so that means a total of Rs 19,44,000 will have to be spent to buy a flat in this kind of a society! Now with rates so high for buying property, you can imagine what will happen to the rent in posh areas like South Delhi and to some extent East Delhi. As it is, in East Delhi renting was becoming far more expensive due to the Metro coming to this area, and now with this increase in circle rates the rents are set to go up by at least Rs 2000. So that means that if you were paying 15,000 for a 2-bedroom flat then now you will have to pay 17,000, what to talk of 3-bedroom flats.

And last but not the least the increase in Auto and Taxi rates. The government decided to raise the downing rate of autos from Rs.10 to Rs.19 for the first two kilometers and then Rs.6.5 for the following kilometers. And for taxis the rates have zoomed up from Rs.15 to Rs 20. That means that you have to shell out Rs.300 now for traveling from New Delhi Railway Station to Upkar Apartments. Just imagine what impact it will have on commuters who use taxis to commute to Indira Gandhi International Airport! We can go on talking about the way the government has increased rates left, right and center.

It’s high time that the ruling party made good on its current punch line – Congress Ka Haath Aam Admi Ke Saath – taking prudent measures towards alleviating the economic conditions of the common man.

The writer is a correspondent of Youth Ki Awaaz. With his interests in socio-political issues, he is more than willing to change the ‘system‘. He sees himself as an ethical journalist in the years to come.

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