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Old 25th September 2012, 17:24   #946
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Fuel prices will keep increasing, the only viable solution is to provide efficient, safe and reliable public transport. Too much to ask for.

As for our PMs remark that money doesnt grow on trees; I need to ask if that is the case, then why do so many politicians get their expenses reimbursed? Has anyone heard of a middle class politician? If we talk about saving money, either cut expenses or increase income. I dont see how much more they can tax us lot, so somewhere they have to cut on expenditure and all those losses due to multiple scams. Start cutting the expenses and splurges and treat politicos like normal workers. In fact I believe not many of them actually need to earn a paisa for the next few generations.

In the short term, they could just deregulate diesel prices on an ongoing basis and provide tax rebates elsewhere. Like someone said, the PDS system needs to be reinforced, rail freight promoted over road transport, reliance on middlemen to be optimised. Again, too much to ask for. But if at least the horse is pointed in the correct direction, we have some hope.

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Old 25th September 2012, 17:49   #947
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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But this will not help, as many farmers are so rich they also drive those fuel guzzling SUVs, they will get their IDs and fill the tanks. its mango people(aam aadmi) like me and others who ride on National Diesel Engine will pay the price.
Not to mention the farmers and whoever have access to these IDs will now actively create a black market of subsidized diesel they purchase leading to hoarding and then an artificial shortage. A perfect recipe for disaster even if you are ready to pay market price which is the cost of selling and an insane amount of taxes. I have nothing against farmers as such but given the way the government has treated them, many of them, specially the well to do ones feel that they can get away with anything. I was reading this article in Reuters a while back where they talked about the big 2009 election gift this government gave which blew a Rs 70000 crore hole in the budget. By arbitrarily asking all the PSU banks to forego all agricultural loans they set such a bad precedent that even now farmers who take loans don't bother to repay them. Instead, the article cited some of them in Maharashtra, who went ahead and bought SUVs instead of repaying the banks. The simple logic was, come election time, the government will again buy their votes with something similar.

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Fuel prices will keep increasing, the only viable solution is to provide efficient, safe and reliable public transport. Too much to ask for.

As for our PMs remark that money doesnt grow on trees; I need to ask if that is the case, then why do so many politicians get their expenses reimbursed? Has anyone heard of a middle class politician? If we talk about saving money, either cut expenses or increase income. I dont see how much more they can tax us lot, so somewhere they have to cut on expenditure and all those losses due to multiple scams. Start cutting the expenses and splurges and treat politicos like normal workers. In fact I believe not many of them actually need to earn a paisa for the next few generations.

In the short term, they could just deregulate diesel prices on an ongoing basis and provide tax rebates elsewhere. Like someone said, the PDS system needs to be reinforced, rail freight promoted over road transport, reliance on middlemen to be optimised. Again, too much to ask for. But if at least the horse is pointed in the correct direction, we have some hope.
Spot on. But the government is not ready to take a haircut it so richly deserves. It is still announcing freebies. I didn't understand the logic of why Congress ruled states were asked to increase the no. of subsidized cylinders from 6 to 9. Did the deficit logic stop when it came to Congress ruled states? All of them are running big budget deficits from what I have seen. I didn't see the PM being pilloried by the policy experts when THAT announcement was made. So the main thing that ails India is politics and corruption that go hand and glove and the subsidies and taxes are used as tools to put lipstick on the pig . You already talked about how these guys blow taxes collected from the public specially the politicos collecting perks many of them having enough criminal cases which would have put Al Capone personally to shame. Cutting all these perks would be enough to improve the salaries of our law enforcement officials thereby reducing their incentive to be corrupt.

Shortsightedness has now come to a situation where this government tries to only plan and manage any situation for some days temporarily addressing some special interest who is shouting the most at any particular point of time. Its important for some sort of an autocratic guy to take over, maybe somebody like Narendra Modi, and hammer out tough solutions. First order of business would be to cut flab left and right in the government, specially current and ex politicians and trim it to its bare essentials. Monitor tax collection and implement strict anti-corruption laws to eliminate wastage. Subsidies can be managed much better, reduced to a great extent, as a result taxes can be brought down in the long run. Nobody is asking to get rid of government totally, we just need more efficient and better governance.

But who am I kidding, none of this will happen.

Last edited by samarjitdhar : 25th September 2012 at 18:00.
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Old 25th September 2012, 21:23   #948
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Farmers, who are actually involved in agriculture, can be issued ID cards or say their ADHAR card should reflect them as farmer and they can produce the same at a retail fuel outlet and take Diesel at subsidised rate, others can enjoy the hight price.

Farmer will fill his tank and sell it outside at price higher than what he paid but a price lower than regular price. He will make enough money to not do farming anymore.
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Old 25th September 2012, 22:15   #949
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Farmer will fill his tank and sell it outside at price higher than what he paid but a price lower than regular price. He will make enough money to not do farming anymore.
Exactly, and thats why there should not be any duel price policy on fuel, they are getting enough SOPs to do farming(Loan waivers, zero tax, benefits of all Govt schemes, atleast they are elligible for, almost zero electricity charge, discounts to buy farm products). Govt must remove all kind of taxes from both Petrol & Diesel and then charge retail price. And price should actually market regulated and change on daily basis, witout any control of Govt. And they must introduce good public trasport system, we are forced to take our cars, given a choice and comfort atleast I will travel in public transport, if it can provide me a genuine last mile connectivity, but I know its day dreaming.
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Old 25th September 2012, 22:25   #950
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Its becoming frustrating ,very frustrating ! A salaried person almost pays one month salary as tax,from that salary whatever he buys,he has to pay excise duty,VAT ,Octroi !
Sadly we can hardly do anything about it! They say cast your vote and use your power, but whomever i choose ,will be a corrupt and nothing changes!
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Old 26th September 2012, 00:16   #951
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Fuel prices will keep increasing, the only viable solution is to provide efficient, safe and reliable public transport. Too much to ask for.
Why too much to ask for? Why is it that we think that we are the greatest and no more a developing nation and still asking?
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Old 26th September 2012, 03:05   #952
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Thumbs up re: Rationalising diesel prices*Update: 50p rise/month announced*

One revolutionary way out to prevent Dieselization of the private vehicles is to outright ban new diesel cars and SUVs.. No private registration of diesel vehicles should be allowed.

This in a period of time, say 20 years will mostly wipe out the diesel use in private sector and still allow trucks, buses and public tour operators to use a subsidised fuel without the Govt. fearing of black market sales of diesel.

For the Private sector the Auto Industry can think of producing more fuel efficient vehicles. (Note that the Current Petrol engine techology only converts around 25% of its energy to kinetic energy). They can also go towards Hybrid or fully electric vehicles.

This will calm down the prices of the day to day things and also have a cleaner and greener earth..
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Old 26th September 2012, 07:29   #953
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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They say cast your vote and use your power, but whomever i choose ,will be a corrupt and nothing changes!
this is all media generated hype to pass the responsibility from individual politicians to the collective masses (unknown faces). Dont fall for it, it is just a way to absolve themselves of blame and point the finger in a general direction. Does anyone of us actually expect to have a non corrupt and capable candidate for the full tenure? As I asked before has anyone of you seen a middle class politician? one who has a mortgage, a small car and commutes by motorbike?

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Why too much to ask for? Why is it that we think that we are the greatest and no more a developing nation and still asking?
ha ha, I was trying to be sarcastic. we can very well continue asking for it. but for some reason we end up accepting our lot/ fate and continue our dreary lives. we do have to earn our daily bread regardless of what infrastructure we have to wallow in.

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One revolutionary way out to prevent Dieselization of the private vehicles is to outright ban new diesel cars and SUVs.. No private registration of diesel vehicles should be allowed.
This could work only if diesel prices were totally deregulated. If subsidies are continued after applying this, then just see how the prices of used diesel cars will go up further.
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Old 16th October 2012, 08:39   #954
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For all those who claimed that the Rs. 5 per litre increase in diesel prices would trigger a massive rise in inflation, please note the actual results. Overall inflation rose in September... to a "massive" 7.8% from 7.6%. (http://economictimes.indiatimes.com/...w/16819566.cms) Food inflation actually fell to a low of 7.9% from 10.9% in April. I suspect that even this result will not be enough for those who refuse to face facts, and keep pretending that an increase in fuel prices is a grave sin. The fact is that even a complete elimination of the diesel subsidy will not lead to a massive spurt in inflation even in the short term, and will bring down long term inflation by encouraging more efficient fuel use and reducing government spending.
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Old 16th October 2012, 09:06   #955
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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For all those who claimed that the Rs. 5 per litre increase in diesel prices would trigger a massive rise in inflation, please note the actual results. Overall inflation rose in September... to a "massive" 7.8% from 7.6%. (http://economictimes.indiatimes.com/...w/16819566.cms) Food inflation actually fell to a low of 7.9% from 10.9% in April. I suspect that even this result will not be enough for those who refuse to face facts, and keep pretending that an increase in fuel prices is a grave sin. The fact is that even a complete elimination of the diesel subsidy will not lead to a massive spurt in inflation even in the short term, and will bring down long term inflation by encouraging more efficient fuel use and reducing government spending.
Wrong interpretation regarding food inflation sir! Current season, just post monsoon, food prices are at their weakest, hence a lower food inflation doesnt reflect that raising diesel prices has no effect, infact the drop in food inflation would have been greater had the diesel prices not been increased.

If we see consumer spending cycle post the festival period (i.e. post Divali), I would not be surprised to see a substantial drop in spending. This lack of spending (due to increased fuel pricing and rising inflation) will keep India in a semi recission :(
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Old 16th October 2012, 09:12   #956
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Expect some more. As Reddy said more or less, the spirit is willing but the flesh is weak.

Also the jokers have realised that what matters is LPG and nothing else.

Last edited by sgiitk : 16th October 2012 at 09:13.
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Old 16th October 2012, 09:15   #957
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Wrong interpretation regarding food inflation sir! Current season, just post monsoon, food prices are at their lack of spending (due to increased fuel pricing and rising inflation) will keep India in a semi recission :(
I have to agree with @Hayek. The point he is making is very fundamental. Compelling efficient usage due to increased prices will trigger efficiencies that no one is bothering about as of date. Why? Simple! It is easy to pass on the inefficiencies due to the cushion that the subsidy provides. Take that away and the situation you have is akin to fighting for survival to an extent. And we all know when our survival is threatened we find reserves within that we never knew existed.

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Old 16th October 2012, 09:36   #958
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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I have to agree with @Hayek. The point he is making is very fundamental. Compelling efficient usage due to increased prices will trigger efficiencies that no one is bothering about as of date. Why? Simple! It is easy to pass on the inefficiencies due to the cushion that the subsidy provides. Take that away and the situation you have is akin to fighting for survival to an extent. And we all know when our survival is threatened we find reserves within that we never knew existed.

interesting argument, if only in theory. However a wholesale rise in diesel prices have helped ensure a price rise in everything, atleast in Mumbai. Bus fares have risen, or are planned to rise, cab/rickshaw prices have risen (stating rise in cost of living), even though they are CNG operated. Railways are mulling a fare hike. Food prices have shown a marginal dip due to good monsoons, which will rise come March.
Now as per honorable Dr Singh, the whole fuel pinch is because the rich drive fuel guzzling diesel SUV's, hence he has allowed a price hike, to combat more such SUV's Now can the govt please stand up and explain how come a Rs 5 hike has made our SUV drivers drive any lesser, by how much has the subsidy burden come down because I am not driving my SUV (not that I have put any less miles after the hike)?
Meanwhile the real poor who need to commute to work in buses (daily wage earners) are the most affected due to this hike.

If we are speaking of inefficencies, then its high time to disband the Public Sector oil companies, who are paying their unionized tanker drivers Rs 45000 per month !! These 'Navratnas' are the heights of inefficencies.
Reduce Indian railways dependance on diesel and ensure all govt transport and personal vehicles shift to CNG within a cut off date. Simple steps like these will reduce our fuel burden by almost half if not more.

Its easiest for a corrupt govt to milk the middle class more, and not take any serious steps in curbing inefficencies all around.
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Old 16th October 2012, 09:55   #959
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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1, Meanwhile the real poor who need to commute to work in buses (daily wage earners) are the most affected due to this hike.

2. If we are speaking of inefficencies, then its high time to disband the Public Sector oil companies, who are paying their unionized tanker drivers Rs 45000 per month !! These 'Navratnas' are the heights of inefficencies.
Reduce Indian railways dependance on diesel and ensure all govt transport and personal vehicles shift to CNG within a cut off date. Simple steps like these will reduce our fuel burden by almost half if not more.

Its easiest for a corrupt govt to milk the middle class more, and not take any serious steps in curbing inefficencies all around.
1. Presumably the savings are proof against inflation in your view.

2, I agree 200%. I think as PSUs need to be disbanded - why not Air India (the worst), BSNL, and so many others. As Maggie used to say,'The Government has no business to be in business'.
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Old 16th October 2012, 09:55   #960
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Now as per honorable Dr Singh, the whole fuel pinch is because the rich drive fuel guzzling diesel SUV's, hence he has allowed a price hike, to combat more such SUV's Now can the govt please stand up and explain how come a Rs 5 hike has made our SUV drivers drive any lesser, by how much has the subsidy burden come down because I am not driving my SUV (not that I have put any less miles after the hike)?
It's irrelevant to me whether the Rs. 5 hike made the SUV owner drive less. What I am happy about is that I am paying 5 Rs less for 'his' fuel. I will be fully happy when all the diesel subsidy is removed and I am paying 0 for 'his' fuel.
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