Can the Current Finance Minister Nirmala Sitharaman Reduce Petrol Prices to Rs 70?
Indeed, Finance Minister Nirmala Sitharaman has the authority to bring down petrol prices, but it is unlikely that she will do so. Given the prevailing sentiments and economic realities, it is more prudent not to lower petrol prices. This decision is rooted in the understanding that consumers do not limit their consumption regardless of the price. This attitude toward consumption patterns presents a challenge to any government trying to reduce petrol prices.
Nevertheless, Nirmala Sitharaman is hailed as the finest Finance Minister of India since 1947. Her profound knowledge of economics surpasses that of her predecessors such as Dr. Manmohan Singh. She remains committed to taking steps in the upcoming budget to further decrease petrol prices, possibly below Rs 70. The support of eminent personalities like Baba Ramdev could also play a crucial role in this endeavor.
The letter 'E' in Nirmala Setharaman’s name elegantly stands for Economist, underscoring her economic acumen.
The Role of Taxes in Petrol Prices
It is essential to understand that the current sale price of petrol includes significant government taxes, encompassing both central and state governments. These taxes contributed to over Rs 3 lakh in revenue for the government in the 2018-2019 fiscal year. Therefore, reducing these taxes to around Rs 65 per litre could significantly lower the price.
However, removing these taxes would have far-reaching implications. Government revenues from these taxes are crucial for funding public development works, providing free services, and offering various subsidies. Cutting down on these public works and subsidies would mean that the government would need to find alternative sources of revenue or drastically reduce spending.
For instance, the government provides free education, healthcare, loan waivers to farmers, and subsidised food through ration cards. Reducing petrol prices might necessitate an increase in school and college fees, hospital consultation costs, and other direct payments. Therefore, the question arises: are people ready to pay for these essential services that are currently provided for free?
The Political Will Vs. Prudence
The political will to reduce petrol prices may exist, but political prudence prevents it. This delicate balance highlights the ongoing struggle between economic reform and socio-economic stability. The transportation sector has undergone significant changes, transitioning from steam engines and external combustion engines to internal combustion engines. The next phase involves the widespread adoption of electric vehicles (EVs).
Encouraging this shift towards green energy requires keeping the cost of fossil fuels high, thus compelling consumers to opt for sustainable alternatives. Lowering petrol prices might lead to resistance from stakeholders, potentially sparking protests similar to the recent farmer agitation. Prioritizing such a paradigm shift is crucial for sustainable progress.
Conclusion
The Finance Minister Nirmala Sitharaman undoubtedly possesses the capability to reduce petrol prices, but the broader socio-economic implications make such a move challenging and complex. While her economic expertise and vision are commendable, the current context necessitates a balanced approach that prioritizes sustainable development over immediate price relief.