The Prime minister made a request to the people of India
that anyone who can afford to buy the LPG gas cylinder without subsidy should
opt out of the direct benefit transfer (DBT) scheme. This will reduce the
subsidy burden of the government marginally, he said. The austerity has hit
the DBT scheme, and what makes it more interesting is, it came out of the PM’s
speech, who was recently not-so-austere on his dresses for special occasions. Let’s
take a look at this request in reality.
It is true that few thousand citizens opted out of the
subsidies and registered themselves to pay in full for their LPG cylinders. This action is definitely out-standing.
But I am not sure, if it is an intelligent economic decision both in the eyes
of the “out-standing” consumer and the exchequer.
In poor and developing nations, you always see this “save
this/that” or “conserver this/that” movements. With water, electricity, trees,
environment, forests, etc. There is always a feeling that something is not
right like before and we could make a little adjustments here & there, and that
would “fix” the problem and it’s all great from there. For years and years, we
in India have seen this “save water” advertisements initially in radios, then
on televisions and in the print media. It instructs the individuals to save
water usage at home. It asks me not to take a bath in two buckets but to wash
myself in a single bucket. The problem with this argument is that – not everyone
is on board. The extra bucket I didn’t consume is used by the neighbor next
door. On top of that – I do not like him to start with. So what is my incentive
to consume less for which I know – will only be used or wasted by someone else.
There is absolutely no incentive. Moral comfort – It’s just an excuse. In
real-time, it just a strategy that doesn’t work. It never works with human
nature at play. The whole thing is a mockery. We should also note that, when
these advertisements where played again and again, the water usage by the rich
and powerful has only increased and the ordinary people have little water now
than say a decade before. In the meanwhile there were no new measures that
increased the amount of water for the population. In other words, the
government wants its citizens to under-consume the water, but it hasn’t tried
to solve the problem at its end. How many liters of water reaches your home
every day? How much has it fallen over the years? It is not because we used so
much water every single day, but the government has not been able to marshal
its resources to provide sufficient portable water to its people. Even partial linking of rivers has not been initiated. Successive governments have sat on it and have provided only lip service during elections.
On the other hand, In developed world, you do not hear these empty rhetoric. Things are planned more efficiently and delivered, mostly by a private player with a intention to profit. There is abundant water for households. There are some studies that say, the amount of water flushed out in American restrooms, is more than the amount of water used by few households in India. It is not a arrogant behavior. It is all about doing what is necessary. The system has been set-up and is maintained that works. This has ensured, that people are not starved of their essentials. Moreover doing it in a better way has ensured, there is minimum wastage. It is a common in the street of our country, where drinking water goes out into the road because a water pipe is broken and it would take days and weeks to fix it. Emphasis is the delivery model - the way water is procured and delivered. They have evolved over time to be better and better. What we need to do in our country is to replicate those ideas and allocate resources. We are not the only country in the world - that uses water!
The giving up of LPG subsidy is just like the “save water” hypocrisy.
Why should someone forgo, the subsidy they “deserve”? If you give it to the
other guy, why can’t you give it to me? If you are not giving me that money,
what happens to that money? I am positive it will be squandered on something
else. Frankly, for a family of 4-5 people, the number of LPG cylinders needed
would be 6 to 8 per year. But the governments maintains it at 12 per year as
part of its vote bank politics. Instead of dealing with those issues, the
government is trying to create sympathy and is begging the normal guy to pay for
it and share the burden. The ultimate “fix” to this problem is to get rid of
subsidies. The market will determine the price.
In fact, the government is in
the midst of the LPG cylinder business and the whole thing is messed up.