Brace yourself up for further hike in price

By O.J.George

The budget ghost has been let loose, and please brace yourself up for further hike in prices of various commodities and products.

The overwhelming effect on prices would be brought in by the hike in excise duty on petrol, diesel, crude oil and overall 10 per cent increase in excise duty of all products. Service tax has also been increased.

The whole exercise is to bridge the fiscal deficit wrought perhaps on the exchequer by last year’s economic stimulus programmes. Now we are paying a price for it.

Anyone can cut the deficit by going on increasing administered prices and removing subsidies. The efficiency of regimes is to put minimum pressure on common man’s living as his earnings are not increasing.

Not only petrol and diesel, but also cement, bikes, cars, mobile phones, jewellery items, air-conditioners, refrigerators, coal, liquor, cigarette, tobacco items would cost more. Let there be some tinkering with the luxury items, but common man’s consumption items costing more would have a tornado effect on their survival.

Already the markets are showing increasing inflationary tendencies. Today’s tax and excise duty proposals would worsen the situation.

There is also a hidden danger in the proposal given out in the economic survey for restructuring the public distribution system. The proposal is to make ration shops redundant by giving coupons to the consumers which can be produced before private vendors.

There would be no statutory strength to this proposal. Since it would be an administrative exercise, the facility can be withdrawn any time.
By that time , the ration shops would have vanished.

In Kerala, there is statutory rationing system. Replacement of this system with an administrative system would deprive the people of their food security. The coupon system, if at all implemented, should be provided with statutory protection.