Saturday, August 1, 2015

#GiveItUp this is the flavor of the season. But isn’t Mr. Modi going in for easy (may or may not really be effective) solutions cloaked in big-sounding slogans (but this is his forte)?

Why may this not succeed to the extent Mr. Narendra Modi (and the rest of us) want? LPG is a necessary item & people who give up subsidy will still consume it. This will not diminish the role/quantum of subsidy in urban/semi-urban residential cooking. Of course, the money gained on waived subsidies can be passed on to those who need it & the initiative needs to be lauded for this honourable intention. But the government would need to import more of LPG for this which may slightly (don’t have the necessary figures, so benefit of doubt goes to the govt.) dent the forex reserves. I am sure the govt. would have worked out the costs involved in setting up distribution infrastructure for this new market opening up. It would also have worked out the additional employment this would generate, as also the additional diesel (a subsidized commodity again) that would be consumed by this new channel & the adverse impact on environment (and health) by this oil going up in smoke. Putting aside all these costs & benefits, this is one of those measures that would return benefits over a long term. Which is, people would learn to pay for what they consume.

But can the PM take this #GiveItUp scheme to the next level? Good news, he can… and it shall ensure more benefits to all (except those giving it up). It’s the electricity, stupid. The electricity supplied to our homes is also subsidized. And the govt. can gain in many ways when the well-off #GiveItUp. The govt. can supply power to the under-served areas/segments & can divert the subsidy to these areas. Most of the electricity consumed by the privileged classes is for non-essentials (think air conditioners, gadgets, appliances or simply the lights & fans left switched on). If people start using these less, there will be surplus power in the network & government simply needs to supply this to areas suffering from load shedding (no additional infra required). Having electricity means people have a longer day for productive tasks, which may lead to higher income (daily wagers can stay back later) & higher literacy levels (children/adults can study during the nights), which would mean higher employability. The power discoms are really in doldrums & need all the cash they can mop up. While the demand for power may or may not go up, the power plants (owned by PSU’s) will at least get paid for the power they generate & supply to the discoms. And yes, unlike LPG cylinders, metered electricity cannot be diverted or sold in the black market!!

But power is one thing no one wants to give up easily – be it political power, administrative power or even the residential power (prove me wrong, folks). And asking someone (especially, a voter) to do so would be disastrous for a politician (especially one who promised #AchheDin). One needs more than a 56-inch chest to do so!

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