[sa_kiran]

If I understand the plan of the govt, then they plan to increase the cost of diesel for car owners. This is a scandal than an actual plan. A few years ago, then the rains failed during July and August, power output from hydel power plans went down drastically leading to huge power cuts. There was heavy rush for diesel to run generators. The govt (or the party) created artificial scarcity and sold diesel at 30-40% premium. Don't be surprised to know that Maharashtra assembly elections were round the corner (during Diwali). Who pocketed the premium?

The same situation will arise with the move to increase the cost only for car owners. This country has no dearth of black marketers.

Ideal situation will be a move to decontrol diesel prices also and work on a package to look after the interests of trains, public transport buses and farmers. I have noticed in the UK that diesel costs a bit higher than petrol, what is the scene in other developed countries?

[Visaster]

Well nothing is every going to get cheaper or going to solve any problem.
India functions like a HUGE "middle class family".
Their solutions dont solve any problem, they spend money on substandard things which give away and repairing it takes more cost than getting the best.
The INDIAN mentality wont change ever be it who rules the country.

Subsidy/ no subsidy we are the only one facing the music directly and indirectly.
The politicians dont loose anything.
If i have to have a opinion on something which will remotely affect me, i will be careless as hell about it.
They should be made to feel the brunt of their decisions.

All subsidy for politicians and govt employes have to be lifted. Pay them the needed salary (for the amount of effort they put at work) and let them spend from that for all their needs, be it the vehicle they travel, car/train/flight/stay...

Indian govt collects so much of tax compared to another country for the nonsense quality we get out of it.
So freaking frustrating to see all the dirt and dust all over the place. Like how all the educated are burdened with tax all the under employed (no tax payers should be burdened with community work (to at least clean up the neighborhood)
LET EVERYONE CONTRIBUTE TO THE COUNTRY.

Will solve all problems of this ridiculous price rise burden for no gain on anyone working hard to improve the country.

[vishwas]

Don't subsidize anybody. Subsidies only encourage inefficiencies.

A tax on diesel vehicles/cars is punitive to manufacturers and bring a bad name to diesels - why penalize them and downgrade a more efficient engine technology for a fuel pricing inefficiency?

Further it is never practical to have differential pricing as the lower cost beneficiaries, will find a way to take it out of that structure and sell it at the higher price. For example, the kerosene mafia - this differential pricing will only encourage further corruption.

The argument that this will increase inflation is a convenient hiding place for the current beneficiaries of this subsidy. Consider the example of a 5 ton truck - suppose the fuel efficiency is 4 kmpl, and the average food item moves 200km before it is consumed. It takes 50l for 5000kgs or 1l for 100kgs. So a 20 Rs hike in fuel prices/l means a 0.20 Rs increase per Kg of food prices. In reality, we are already seeing food price inflation which is much higher. And not cutting the subsidy has not helped control that inflation.

Cheap fuel encourages inefficiencies - so many buses and trucks that we see on the road are way past their normal operating life - belching smoke, unsafe and very inefficient. Cheap fuel keeps these vehicles on the road for much longer.

A properly priced fuel will encourage other mechanisms - eg. rail freight is much more fuel efficient that trucks.

So it is time to bite the bullet and sell diesel at market prices.

[srishiva]

Now I would have to fuel my car with the diesel from our tractor. Why is the govt hell bent on creating dirty ideas?

[benbsb29]

Time to buy a fuel bunk, since this is where a whole lot of money in the form of bribes is going to come in. When a private car stops by to fill diesel, just slip some money to the attendant, and ask him to fill fuel at the lower rate.

Net gain for both parties.

I'm amazed at the way the FM thinks. It would be better to do away with the entire subsidy, and die once, than die at every tankfill.

[Visaster]

They should address the root cause of the problem to stop inflation than keep using the age old Indian damage control ideologies.

Make everyone work for their money, comfort, space...
I see so many lazy fellows on the road enjoying the hard work put in by someone else to keep the country at float.

Legalized registry for the whole population of INDIA
Community service had to be made a must for people who don't contribute enough for the betterment of the country.

India is known for its population and it is the only reason why the country is chocking, if me convert our population into strength then imagine where the country can be taken.

Our fuel prices and all other prices will fall straight down.

Alternate fuel is the only other way to get out of our uncontrollable need for something which we don't own.

Our dependence on countries with crude oil should be kept at control by some means. Present trend is heading to dooms day.

[PuntoMania]

Originally Posted by selfdrive

I am not sure of this as I was most probably dozing off or talking to someone during my economics class. If this is correct, then the projected GDP growth will always take a hit as the inflation is always rising more than the initial projections.

Not what I meant, when we read in the newspapers GDP has grown by X percentage in this quarter, it means that this growth rate has already accounted for Y percent in inflation.

[esteem_lover]

Originally Posted by benbsb29

I'm amazed at the way the FM thinks. It would be better to do away with the entire subsidy, and die once, than die at every tankfill.

The transport cartel in this country is even bigger than the biggest Italian Mafia. The FM CANNOT think, he has to OBEY.

[nomadabhi]

Originally Posted by vinya_jag

My suggestion:
Drive both cars. If you love driving the diesel for its mid range torque, buy that.
If you like the free revving petrol and its quietness, buy the petrol

Forget what amount of money you save and enjoy your car.

Very true, I can see myself 'common man' paying the price either to the car manf. or to the govt. So I decide my own happiness in cruching roads.

If onion or salt price hikes, we dont stop consuming them, do we? Poor vehicle which we bought with heart/mind has nothing else to feed.

Since hike went from 65 to 70 per litre, the journey didn't stop but started car pooling. At times on outings, included friends which again cuts the share of fuel.

So, considering that I will be paying to someone or other for my leisure, finding ways to survive as I am among those who prefer car seat and windshield rather than a sofa and TV at home.

[Stig]

My 2 cents

Why should we remove diesel subsidy?
Diesel subsidy is not about giving fuel at a cheaper price, it is also about getting growth figures which an economy would not have achieved, had the fuel that drives the nation was not subsidized. Since economy grows at a faster pace, more money is there in the economy, purchasing power increases in turn increasing inflation. So diesel subsidy is there to control the commodity prices and thereby inflation, it is not a fool proof way of tacking it and is a pretense.

Why can't we remove diesel subsidy?
In a democracy, once you give a right, it becomes a birth right. And who so ever wants to take that away is considered devil. And no political party wants to go into this mess.

How can we remove diesel subsidy?
A bit of politics and diplomacy needs to be introduced. When removing the subsidy, lower the taxes on diesel or make the tax on diesel a fixed value rather than a percentage and make sure that when the diesel subsidy is removed, before and after prices are in the ballpark.

[aaggoswami]

Originally Posted by Visaster

1) India functions like a HUGE "middle class family".
2) Subsidy/ no subsidy we are the only one facing the music directly and indirectly.
3) They should be made to feel the brunt of their decisions.

1) I disagree. India functions as a corrupt, selfish family favoring rich and ignoring middle class. That is why we have so many taxes and middle class as usual suffers.

2) Correct. But what can we do ?

3) Impossible unless Lord Vishnu again comes on this earth to bring stability in India. But the cost paid by good people would be very high.

Originally Posted by benbsb29

4) I'm amazed at the way the FM thinks. It would be better to do away with the entire subsidy, and die once, than die at every tankfill.

4) a) The politician's, their behavior and actions never cease to amaze me. How low can things get ?
b) Even after the subsidy is taken away, taxes are omni-present. We need a total reform.

Originally Posted by Visaster

5) They should address the root cause of the problem to stop inflation than keep using the age old Indian damage control ideologies.

6) I see so many lazy fellows on the road enjoying the hard work put in by someone else to keep the country at float.

5) The root causes are : Corruption, mismanagement, lack of law and order, lack of planning. And biggest of them all, mentality. It just cannot be changed.

6) That is a bad scene which hits one to his heart. But again what can we do ?

Originally Posted by esteem_lover

7) The transport cartel in this country is even bigger than the biggest Italian Mafia. The FM CANNOT think, he has to OBEY.

7) Can we now say that Mafia is running our country ( directly or indirectly ) ?
Somebody is burnt alive by Oil Mafia, Adarsh case and this fuel hike, etc.
So finally, can we say that Oil Mafia X Real Estate Mafia X Transport Mafia = Rulers of India ( currently ) ?

Where are we heading ? Defense is not as strong as it was before ( two fighter jets crashing in a span of few days, 27 years of LCA but its still not available ), law and order going down the drain, inflation is super high. Forget that, just think state of our country after 50 years. Serious lack of planning, implementation will take us nowhere. This way, one day we will be ruled by our neighbors.

The future is very insecure and good things do exist, but only on paper. I am wondering who can actually help our country. We need total reform from grounds up.

[Pri2]

Originally Posted by esteem_lover

The transport cartel in this country is even bigger than the biggest Italian Mafia. The FM CANNOT think, he has to OBEY.

I totally agree on the above comment.
The transport cartel in our country can do anything to make sure their business isn't harmed.

Here is a good example:
-The Railway line between Mangalore to Bangalore was delayed for more than a decade because of the vested interest of the transport cartel.
-Even after the railway line was opened, it wasn't complete. Trains still have to go via Mysore. (Takes 7 hours by bus and 12 hours by train to cover this distance)
-When the transport cartel realized that that people are opting for trains even if the journey was longer by 5 hours, they made the railways start the train from Kanoor instead of Mangalore - as the trains would be filled with people coming from Kanoor and people in Mangalore wouldn't get tickets.

By looking at all this, removing subsidy on diesel would be impossible for the govt. And IMO, having dual pricing for Diesel is next to impossible. Unless they have separate pumps that sell subsidized diesel. BTW, you would start getting diesel in black after that.

[ra'ul M]

Originally Posted by channelv

If diesel prices goes up, the cost on transportation of goods goes up or in other words, Inflation would easily cross 10%!

When the country is growing at 6% and inflation is hitting 10% for the common man (Aam aadmi), the country is growing at negative 4%!

GDP is adjusted for inflation and increase in population. It would not make sense otherwise to publish the figure as it would be pretty much unusable. But yes, the GDP would come down. But the formula is a little more complicated than subtracting the latter from the former.

Originally Posted by PuntoMania

This is not true as far as I know. GDP growth does factor in price rise before giving us growth figures. So 6% is 6% after inflation and not before (learnt this in economics,some economics guru here please correct if I'm wrong)

You are correct. Raw GDP figures are rarely published. Real GDP if 6% will be 6%. i am not a guru though, just like the subject

[civic-sense]

Govt is losing money on the behest of "greedy" car owners who decides to cash in on subsidised diesel. Ignoring this fact and putting the blame squarely on the govt is just an attempt to run away from the blame.

Either the govt should remove all subsidies or tax diesel cars. There isn't an easier way.

[Pri2]

Originally Posted by civic-sense

Govt is losing money on the behest of "greedy" car owners who decides to cash in on subsidised diesel. Ignoring this fact and putting the blame squarely on the govt is just an attempt to run away from the blame.

Either the govt should remove all subsidies or tax diesel cars. There isn't an easier way.

According to your logic, everyone in India (Including you) is greedy as we use subsidised cooking gas (LPG). I agree subsidising diesel is wrong, but so is LPG!