The government of India announced over the weekend a fuel price hike on petroleum products across the country. A five Rs/Liter hike.
Over the next few months other major changes are expected on the fuel subsidy front-
while this is in one way good for ensuring that market dynamics drive down the usage of petroleum products ( emerging markets actually had a drop is consumption by 0.5% across the globe), it is going to kill the indian economy and the people with it.
With inflation at extremely high numbers, the indian economy is losing its sheen and cost arbitrage especially in the outsourcing space. Already other countries have started taking a hold in the international markets.
While the government does this , it must also look to improve the effectiveness of its tax utilization schemes. Some arbitary numbers indicate that only 10-20% of what is allocated actually reaches the final end users and the balance is used to grease palms of businessmen and politicians. Clearly this is what we saw with the scams that have hit the country.
All of us as individuals need to stand up to this- A good start was made by the anna hazare campaign on lok pal bill- but it looks like it has died down. There is a lack of news on this subject recently.
in the meantime- it becomes even more important to focus on financials and keep your financial health- healthy!
Happy investing.
( Dont forget to subscribe to the posts using the links on the right)
Over the next few months other major changes are expected on the fuel subsidy front-
- Reduction in subsidies in cooking gas . ( from what i have heard is that 3-4 cylinders a year will be made available on subsidy , and anything beyond that will be at market price)
- Diesel prices are also expected to shoot up.
while this is in one way good for ensuring that market dynamics drive down the usage of petroleum products ( emerging markets actually had a drop is consumption by 0.5% across the globe), it is going to kill the indian economy and the people with it.
With inflation at extremely high numbers, the indian economy is losing its sheen and cost arbitrage especially in the outsourcing space. Already other countries have started taking a hold in the international markets.
While the government does this , it must also look to improve the effectiveness of its tax utilization schemes. Some arbitary numbers indicate that only 10-20% of what is allocated actually reaches the final end users and the balance is used to grease palms of businessmen and politicians. Clearly this is what we saw with the scams that have hit the country.
All of us as individuals need to stand up to this- A good start was made by the anna hazare campaign on lok pal bill- but it looks like it has died down. There is a lack of news on this subject recently.
in the meantime- it becomes even more important to focus on financials and keep your financial health- healthy!
Happy investing.
( Dont forget to subscribe to the posts using the links on the right)
Posts
No comments:
Post a Comment