Tuesday, June 03, 2008

Subsidising Regression

Cost of the Chennai's MRTS: Rs.1,000 Crore (over 20 Years)

Cost of Delhi Metro: Rs 10,500 Crore (over 10 years)

Cost of National fuel subsidy: Rs: 200,000 Crore (in 2007-08 - 1 year)

Considering a Bus costs Rs.0.25 Crore approx and the subsidy on petrol is Rs 15/litre (A bus for every 1.6Lakh litres petrol subsidy!)

It's obvious that the government has frittered away a lot of money to prevent a possible loss at the next general elections. While the MRTS and the Metro have been dubbed as part failures because their patronage is not to their full capacity (where again the blame lies with the governments) imagine we could've had Metros across all our major cities and MRTSs across all other major towns and cities and thousands of buses for the whole country just with this year's fuel subsidy.

One of the UPA government's biggest mistakes was removing the Administered Price Mechanism of the NDA which made changes in cost of petrol a mathematical process rather than a political decision. The best news I've heard in this regard has been that the national petroleum companies have started rationing fuel and their impending bankruptcy and closure within a few months if the fuel price subsidy is not removed/rationalised. When that happens, it'll be doomsday for the UPA and a lesson for all selfish power-hungry politicians who come to power in the future.

If the government can afford so much on short-term subsidies they can definitely afford better public transport for all of us.

If people can't afford to pay for the true cost of fuel, they can't afford the true cost of damaging the environment either!

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