Petrol and diesel prices have been skyrocketing for the past few months. The price of both petrol and diesel has now crossed Rs 100 per litre in all parts of the country, breaking all previous records. Everyone knows that the burden of this price of petrol and diesel will ultimately fall on the majority of the poor people in the country, including workers and peasants, even though they never buy petrol or diesel themselves. Rise in oil prices, especially diesel, will increase transportation costs. As a result, bus fares will increase, the price of everything we need, including vegetables, will increase. It is also wrong to say that it will increase, the price of vegetables has already gone up as a result of the increase in the price of oil this time and we are all feeling the pinch of it.
Why is the price of petrol and diesel increasing like this? We all know the government's argument - the price of crude oil or petroleum is rising in the international market, so the price of oil in the domestic market will rise, hence what else can be done? But, all the bourgeois media is now reporting very loudly - the government is not telling the truth at all. The main reason for the rise in petrol and diesel prices is not the rise in oil prices in the international market. The biggest reason for the increase in petrol and diesel prices in this country's market is the government's tax on oil. According to an estimate on July 1, the price of petrol in Delhi was Rs 98.80 per litre, of which Rs 55.70 was government tax. This means that the government's tax rate on petrol is 56.37%. There is some difference in the price of petrol and diesel in each state and there may be some difference in the share of tax, but the calculation is nearly the same everywhere. [Source 1] The government's tax on diesel is also near about the same. According to a May 15 calculation, the government tax on petrol in Delhi is 58.6% and the government tax on diesel is 52.85%. [Source 2]
But, that is just one aspect of the information. More importantly, not only has the amount of taxes increased; the government has also consistently increased the tax rate. This means that if the price of an item is 50 rupees and the government tax is 20%, then the tax amount will be 10 rupees. And if the price of the item increases to 100 rupees, then even if the tax rate does not increase, the amount of tax will become 20 rupees. In other words, even if the tax rate does not increase, the amount of tax should increase. It means that even if the tax rate does not increase, the amount of tax on petrol and diesel is bound to increase. However, taxes have risen even more. In the last 7 years, not only the amount of tax on petrol and diesel has increased, the tax rate has also been continuously increased.
In June 2014, when the BJP or the NDA alliance led by Modiji came to power with the dream of 'Achche Din', the price of petrol in Delhi was Rs 73 and the tax was Rs 22.60. And the calculation for the 1st of July this year is already mentioned, the price of a litre of petrol is 98.80 rupees, of which 55 rupees 70 paise is the tax. In other words, the tax on one litre of petrol has increased by Rs. 33.10. Just see, the price of a litre of petrol is 39 rupees 30 paise excluding taxes. And the government's tax on it has increased by 33 rupees 10 paise. And the whole of this is in the period of 'Achche Din' of the Modi government. But, another point comes up through this --- then the tax rate on petrol was nearly31% (specifically, 30.95%). Now the tax rate is 56.37%. In other words, in the last seven years, the Modi government has not only collected more tax on petrol and diesel per litre, but they collected it also at a higher rate. [Source 1] Where is the highest government tax on petrol and diesel in the world? It is in India. In this respect, India has won the best (or worst?) position in the world!
As a result, by what amount the government's income has increased? One estimate is that when the Modi government first came to power, the central government collected a tax of Rs 74,158 crore on petroleum products in 2014-15. And where does it stand in 2020-21 after the increase? The statement of the State Minister Anurag Thakur in the parliament says that in the 10 months from April 2020 to January 2021, the government has collected Rs. 295,000 crore, which is more than 300% compared to 2014-15. The calculation for the whole year will naturally be more. [Source 3]
The government raised taxes like this but why didn't we get a clue? The reason is that since Modi first came to power in 2014, he got an advantage - petrol and diesel prices have been falling in the international market. In 2012, the price of crude oil in the international market was $ 112 per barrel. That dropped to just $ 26 in 2016. (1 barrel means about 159 litres). This means that in the two years from 2014 to 2016, the price of oil in the international market has decreased by 75%. However, the government made almost no reduction in the price of oil in the country's market. At that time, the price of petrol and diesel in the country's market decreased by 13% and 5% respectively. [Source 3] The government then continued to increase taxes on petrol and diesel to take advantage of the reduction in oil prices in the international market. Since the price of oil had come down a little bit, it did not affect the people and did not cause much furore. After 2018, oil prices started rising again in the international market. Instead of controlling the price of oil in the domestic market by reducing the government taxes, the government started raising the price of oil under the pretext of increase of the price of oil in the international market. Now the price of oil in the international market is about $ 77 per barrel. If the price of petrol-diesel exceeds Rs 100 now, what will be the price of petrol-diesel in the country's market when the price of oil rises to $ 112 per barrel like in 2012? Will it be 150 rupees? And what if the price of petroleum in the international market became 149 per barrel like in 2008? Then will the government sell petrol-diesel at Rs 200 per litre in the country's market? In which devastating direction Modi's BJP central government is leading the people of the country to?
Hitler had Goebbels. His policy was to tell lies over and over again and then people would start accepting the lies as true. So is the policy of Modi or BJP-cum-Sangh Parivar. Every day they are cultivating lies. And their IT cell is at the forefront of that work. This IT cell tweeted a few days ago that the real culprit behind the increase in petrol and diesel prices is the UPA government. Why? Because, when the UPA government was in power, they borrowed from the market by floating a bond called oil bond in the market and they gave subsidy on oil with that borrowed money. The government is saying that now they have to repay the loan, so there is no way but to increase the price of oil.
That is a complete lie. It is true that the UPA government borrowed from the market by floating oil bonds. However, almost nothing of that borrowed amount has to be repaid by this government so far. In 2015, only 3500 crore rupees had to be paid. So, oil bonds had nothing to do with the hike in petrol and diesel taxes by the Modi government for so long. It is true that from now until 2026, the government will have to repay the interest and principal of these oil bonds. But, how much is that? In 2021-22, the government will have to pay 20 thousand crore rupees. Even if that money is paid from the tax money, it can be seen that the government has increased the tax by another 2 lakh crore rupees in the last 6 years. So, oil bonds have nothing to do with increasing taxes by Rs 2 lakh crore, right?
Now the question is, why did the government increase the tax, most of which tax money has to be paid by the toiling people including workers and farmers or the middle class? Before going into the question of why the government increased the tax, it should be made clear that even if Modi or the BJP central government is the mastermind of this whole conspiracy, the governments of other parties also are not with clean hands. Part of the tax on petrol and diesel is central, the rest is of state. As of June 2014, 16.71% of petrol price was state tax and 14.2% was central tax. In July 2021, the central tax on petrol is now 33.3%, which means the Modi government has more than doubled the tax rate. However, the state governments did not sit still. Now the state tax rate is about 23%. That is, the tax rate of the state has increased even though it has not increased like the centre [Source 1]. Are state governments waiving a portion of this tax? No, they are not. The two governments that have given tax exemptions in February this year are West Bengal and Assam - the reason should not be difficult for anyone to understand. Election was held in May in both states.
In this age of globalisation and liberalisation, governments and their intellectuals and the representatives of the big bourgeoisie say one thing - the government should not be in business, running the business is the job of bourgeoisie, the responsibility of the business should be left to them and the job of the government is to rule only. One more thing they say - that the government should not maintain control over the price of any commodity. The price will be fixed by the market. Fixing of the price by the market means fixing by monopoly capital, that we all know; we will not go into that question here. The question is then why the government is fixing the price in the business of petrol and diesel? If the rules that the government or the representatives of the bourgeoisie were talking about were followed here, then the price of petrol and diesel should have come down in the same way as the prices in the international market. Why is the government not doing that? One rule when the government loses, and another rule when the government gains? The government has very good rules.
It is a 'head I win tail you lose' situation in favour of the government where people will always be the loser. What a deal!
Even assuming that it is the Modi government's own decision, the question arises as to why the representatives of the big bourgeoisie are not giving them that advice. They also give various suggestions to the government from time to time. So, are the interests of the big bourgeoisie also involved? That's right. After the Indian economy went through a development or boom in the first decade of this millennium, a phase of recession has started in the economy since the global financial crisis of 2008-09, which has deepened day by day. As long as the profits of the big bourgeoisie were increasing, they were satisfied with the policy of the government, that is, the then UPA government. But since 2010, they have been vocal about reforming the economy so that they can increase their falling profits. For that reason, they began to severely criticise the policy paralysis of the second UPA government. It is also not unknown to us that a significant and influential section of the big bourgeoisie tried heart and soul to bring Narendra Modi, the architect of the Gujarat model, to power so that an economic reform as per their desire could be carried out under the leadership of the Modi government. We have seen the number of steps the Modi government has taken in the last 7-8 years in the interest of big capitalists; this is not the place to explain that. However, a major aspect of the government's move has been the reduction of taxes on the big bourgeoisie on the one hand, and various incentives and relief packages given to them from the government treasury on the other. For example, during the UPA government, the balance of indirect taxes and direct taxes shifted towards direct taxes. That is, the share of direct taxes in government revenue was increased. We know that direct taxes are paid by capitalist organisations and the rich and the upper middle class. The Modi government started reducing the share of direct taxes in the interest of the big capitalists. The biggest advantage of the big bourgeoisie has been the reduction of corporate taxes, which have been reduced from about 40% to 25%. This increased the profit rate of the big capitalists. To increase the rate of profit, bringing in labour laws to open the way for more exploitation of workers, bringing in agricultural laws to open up more fields for big capitalists for investment of capital, allowing concessions for investment in new fields, handing over the public sector organisations to the big capitalists in the name of disinvestment- this government has done all these. However, it is not possible to overcome the recession with that alone. A big reason for the economic recession is that the country's market is shrinking; the people of the country do not have money to buy. The government needs to arrange consumer credit to expand the market, invest in infrastructure. Bourgeois economists think that this will open the market. But, where will this money come from? It cannot be obtained from the capitalists; on the contrary, they have to give concessions. The government's revenue from indirect taxes (mainly GST) is not increasing due to the economic recession. The government needs to increase its revenue, not by putting pressure on the capitalists, but by giving them concessions. The means are very limited in the hands of the government. One way is to sell the inherited property, the property of the people, to them – that is disinvestment. Another way is to increase the price of petroleum products. The government has not brought petroleum products under GST from the very beginning in order to increase income by imposing taxes on petroleum products as required. After 2014, the government had the advantage of being able to raise taxes without raising oil prices in the domestic market due to falling oil prices in the international market. For that reason, the government has raised taxes as much as possible, keeping oil prices at one level. But, now that oil prices have started rising in the international market, oil prices are rising in the domestic market. However, the state of the economy is now such that the expenditure of government has risen sharply, especially since the aggravation of recession during the Corona pandemic in last two years. In this situation, the government is not able to reduce taxes on petrol and diesel. Then the income will go down. Subsidies are already increasing. If the income decreases further, the subsidy will increase. However, it is not that the big bourgeoisie has no problem with the rise of oil prices. A few days ago, an English daily, a representative of the big bourgeoisie warned government about it. They said data from the State Bank of India showed that the way prices are rising due to the hike in petrol and diesel prices this has led to a reduction in the expenditure for consumer goods. In other words, the purchasing power of the people is decreasing further. And then it will be more difficult to get the economy out of the recession. That is why they have suggested a partial tax cut. That is, government is now on the horns of a dilemma. We do not know what steps the central government and the big capitalists will take in the coming days to save them from this crisis, but one thing is for sure. Whatever steps they take, it will be in the interests of the big bourgeoisie and they will seek to get out of this crisis by increasing the burden on the working people.
We have to understand that the increase in the price of petrol and diesel is in fact the result of this capitalist economy and the policies of the governments guarding the big capitalists to save it. As a result, it is not up to the revolutionaries to find a solution in any of the steps within this system. It is not the job of the revolutionaries to convince whether there would be a solution to this, or whether the toiling people would be better off, even though slightly, if there were some other government than this Modi government. At present, due to the rise in petrol and diesel prices, the working people have to learn from the experiences they are going through and make them aware that the cause of this crisis in their lives is the exploitation of the capitalists and the only way out is to end that exploitation. And we have to wake them up to fight for that goal. This is the work of revolutionaries.
Source:
1. The Print
2. Autocar
https://www.autocarindia.com/car-news/petrol-diesel-price-and-tax-break-down-in-india-420823
3. Hindustan Times, March 22,
Comments:
No Comments for View