KJ Alphons’ remark on fuel price hike has zero economic logic
As of 2015, 28.6 million people own cars and 154.3 million bikes but many have bought them with loans. Very few are outright purchases. Now, if they can service the loan it can also be said that they can afford the vehicle but does that make them rich?columns Updated: Sep 23, 2017 20:51 IST
One definition of a politician is a person who has a tendency to speak too much and, when he does, often ends up saying the silliest things. A reason for the first is that politicians think they know better than the rest of us. A reason for the second is that they rarely pause to consider what they’re saying.
A recent example is the delightfully named Mr Alphons – a name that recalls not just the delicious Maharashtrian mango but also obscure Iberian royalty. Justifying the exorbitant price of petrol and diesel, he said: “Who buys petrol? Somebody with a car, somebody with a bike. Certainly they are not starving. Somebody who can afford to pay has to pay.”
This raises a critical question: Should taxpayers be squeezed till their pips squeak? Unfortunately, I doubt if this thought has occurred to the good minister.
As of 2015, 28.6 million people own cars and 154.3 million bikes but many have bought them with loans. Very few are outright purchases. Now, if they can service the loan it can also be said that they can afford the vehicle but does that make them rich? Does that mean they have surplus cash the government can justifiably tax? And, finally, are they morally bound to pay for the roads, bridges or toilets the country needs? But I doubt if the Minister even considered these questions.
More importantly, the minister seems to have forgotten that excise duty on petrol and diesel has been increased on 11 occasions since May 2014, thus rising by 127% and 387% respectively, whilst the states have repeatedly enhanced sales tax and VAT. Today, as a result, we pay more in tax than the actual price of petrol and diesel.
Yet dear Mr Alphons thinks we should pay more. He comes to this conclusion because there’s still a little jingling in our pockets. What we have left, which might be intended for a toy for your child, a saree for your wife or a bottle of something special to lift your spirits, can, he believes, be legitimately grabbed by the government to pay for the nation’s development. That has priority.
So what’s the conclusion? In moral terms, it’s not for us to decide how to spend our money. The government will tax and deploy it as it thinks fit.
In economic terms its worse. In the absence of private investment, accelerating exports and the potential for sizable government spending, the only engine of growth is private consumption. But for individuals like you and me to consume we must have the money to do so. The more the greedy minister takes away, the more he will undermine economic growth.
I suspect neither the moral nor the economic argument have occurred to our beloved minister. Or, bless his socks, he wouldn’t have spoken.
Now, I don’t expect politicians to be geniuses and, frankly, Einstein would probably have made a very bad one. Mr Alphons is no worse than any of the others. He’s just the best example to illustrate my point. And it’s a simple one: Think before you speak and, then, only say as much as you’ve carefully thought through.
Otherwise, you could live up to Disraeli’s famous description of Gladstone: “A sophistical rhetorician, inebriated with the exuberance of his own verbosity, and gifted with an egotistical imagination that can at all times command an interminable and inconsistent series of arguments to malign an opponent and to glorify himself.”
The views expressed are personal