The Economics Of Common Man

The Economics of Common Man

The Manmohan Singh Government has announced the diesel price hike, his words seems appealing to many of us. As a student of Economics, I do, in more than one way understand the PM's call for price hike. With the increase in Govt. expenditure, and with more projects to come, no Govt would consider cutting on its revenue side. Had it been BJP in Power, they would have done the same thing. All the points he has mentioned, from the economic pint of view, seems to be viable.

To stand tall, as a country, if FDI- in retail is what it takes for the boom in economy, then that's the way. With more competition, the consumers surely will be benefited, and in the long run, the small traders will have their share of gain. India has been very unique in terms of the economy, it is unpredictable and the global companies have also found it difficult to understand the market structure, and consumer pattern of India. In Ahmedabad itself, the ratanpol market, the CEPT and Nehrunagar footpath market, and global brands like Levis, etc. are doing equally well. The funniest part is- the same consumer who wears a Levi’s jeans also goes to the ratanpol market.

When it comes to Diesel Price Hike, Most of us will say that govt. can simply increase the prices by keeping the taxes constant, that way, the burden will not totally fall on the consumers. But as the say "Death and Taxes are Inevitable!" Just like any profit making organization, the Govt knows that the people will complain but finally accept the price hike. And surely, the govt. doesn’t want to give away its revenue.

But there is one thing that we all have overlooked in this matter-

The Govt's loss in figures, as stated by the PM- Rs 2,00,000 crores

The Govt Losses in the various major scams (considering year 2012)

Coal gate Scam-185,591.34 crores

UP NRHM SCam-10000 crores

Karnataka Board Land Scam- 200000crores

The total is 395591.34 crores

The figures say it all- Regardless the Scam under state or Central Govt, IF they hadn’t taken place, the economy would be running efficiently. I am not against FDI-retail, or Price hike-but I believe we can recover from further losses just by preventing Corruption. That way, the common man wouldn't need to taste the bitter medicine.

-Maitreyee Purohit