L E T T E R S    T O    T H E    E D I T O R

States cannot escape responsibility

While the Centre is responsible for adding to the woes of the common man, the state governments cannot escape the blame (editorial “Petrol shoots up”, May25). Crude oil is purchased at the rate of $105 per barrel (42 gallons) which means that 158.98 litres of crude oil costs Rs 5,775. Hence, one litre of crude oil costs about Rs 36.30. If we add purification charges of 50 paisa per litre and 20 paisa per litre other unexpected charges, we find that the companies can easily sell the petrol at the rate of Rs 37 per litre, without any loss or profit. If we add Rs 3 per litre as the profit, the companies can sell petrol to the consumers at the rate of Rs 40 per litre. However, it does not happen. Centre imposes 7.5% custom duty, Rs. 2 additional custom duty, Rs 6.5 counter weeling duty, Rs 6.5 special additional duty, Rs 6.35 VAT, Rs 2 additional excise, Rs 6 special additional excise. To add fuel to consumers’ woes, the Punjab state government imposes 27% VAT, 10% surcharge, 1% cess and 1% entry tax.

Punjab CM Parkash Singh Badal must have been happier as Punjab can levy more tax on petrol now due to enhanced rate and Punjab will earn Rs 120 crore extra with this hike. But people would feel happy too if you reduce the state tax on petrol, Mr Badal.

SURINDER KAUR SUR, Jagraon

Rising debt

The condition of the Indian economy is worse than what has been described in Sanjeev Sharma’s article “It is crunch time, govt must show grit’’(May 25). Besides the five parameters (current account deficit, fiscal deficit, inflation, devaluation of rupee and sluggish growth) there are three more factors which are denting the economy. These are bad loans/ NPAs (Rs 1.5 lakh crore), rising debt of states and flight of capital. The outstanding loans in power and real estate sectors are Rs 4.0 lakh crore.

The debt of Punjab government is Rs 78,000 cr and that of WB government is Rs 2.2 lakh crore. Mamta is right when she moans,” My government has to pay an annual interest of Rs 22,000 crore on the outstanding loan and hardly any amount is left in the treasury to run the administration”. The basic cause of the poor state of affairs is the paralysis in governance both at the Centre and state levels.

To give one example, Posco came to Odisha to set up a Rs 50,000 crore steel plant (12mt capacity) in 2005. Till now the company is sitting high and dry for want of various clearances and the land. Now it has become a fashion with the Finance Minister to blame the Eurozone crisis for the ill-health of the economy. On the other hand West Bengal, Jharkhand and aviation sector are going the Greek way because of rising debts. The situation in Punjab, UP, Uttarakhand and Odisha is akin to that of Portugal, Spain and Italy.

RAM NIWAS MALIK, Gurgaon

II

A layman does not understand the economics and politics of frequent price hikes.  All the talk of rate of growth, GDP, inflation and devaluation of rupee go over his head.  He is only concerned about his household needs which are going beyond his reach.  Although there are frequent price hikes, there is no increase in his income.  The gap between what he needs for a decent living and what he can afford has increased.  The economic inequality and disparity has been increasing with 80 pc of the country’s wealth quietly settling in the hands of the 20 pc rich and affluent sections of the population. 

Economists, social thinkers, politicians and some of the best brains in the country have been theorising, philosophising and propagating policies and programmes that are only contributing to the chasm between the rich and the poor. 

ZULFIKHAR AKRAM, Bangalore

‘Peg-egg-leg’ formula  It seems that honest and dedicated performance of a government official no longer helps him earn timely promotion and approbation by the superiors. To win the superior’s confidence, one has to obey their oral orders, however whimsical. To maintain a good ACR (Annual Confidential Report), employees use the notorious “peg-egg-leg formula” to please the fun-loving boss. The well-known stick and carrot policy seems to have come in handy for the powers-that-be to tame the bureaucracy which, by and large, has virtually degenerated into a “spineless wonder”. The situation seems to have reached such a pass that whenever a bureaucrat is asked by his political boss to bend a little, the former instinctively falls flat on the ground. Is career advancement at any cost a worthwhile goal? What about the lofty ideals the bureaucracy reportedly cherished in the good old days? TARA CHAND, Ambota (Una )