India isn’t immune to fuel price protests and France is a further lesson why policy cannot be totally people-unfriendly
Who would have thought that the Arc de Triomphe would be defiled or that Champs-Elysee would be a screaming sea of looting and torching protesters, all wearing yellow vests to make themselves visible and audible, over a fuel hike by the Emmanuel Macron Government? About 136,000 people on the streets, massive teargassing and arrests, people scaling up arches and structures, ransacking stores and smashing cars — these conflict zone scenarios are somewhat acceptable in our part of the world. At least in public perception. Paris has not seen such desperation and anger for the last few decades but let us not forget that revolution is not new to it. Or that it has cradled the anarchist movement at one time. Disruptive thinkers like Sylvain Maréchal, who wrote the Manifesto of the Equals (1796), demanded “the communal enjoyment of the fruits of the earth” and looked forward to the disappearance of “the revolting distinction of the rich and poor, of great and small, of masters and valets, of governors and governed.” Parisians, in fact, have always claimed their own rights and liberties through violent and firebrand means as well, the cobblestone protests by students in 1968 a classic case, where they manifested their anger by upturning pavements and throwing stones at the police. Besides, citizens have always found raucous solidarity when they want to be seen, heard and responded to. This time they have consigned the Macron Government, which has increased fuel prices to ostensibly tax hydrocarbons, reduce pollutants and save the environment, to a monarchical role far removed from reality. Protesters claim that the hike has further pushed up living indices, already affected by global economic slowdowns, and would be affecting non-city dwellers who commute for the sake of their livelihood. What is significant is that Macron cannot claim the protests were orchestrated by political rivals as the “yellow vests” movement is largely social media-dictated with no identifiable leadership and includes a range of participants from the anarchist far left to the nationalist far right and moderates in between. So it is as popular an upsurge as it can get. Second, the issue also raises important questions of justifying harsh environment decisions with domestic issues and most importantly people’s liveability index. For any Government, this is a tall order and coercive emergency clampdowns won’t in any way work till it works out an effective but graded way of sustaining costs.
India has been no stranger to fuel price hike protests in the last quarter, albeit in a disparate manner across the cities, as petrol hit Rs 81.63 per litre and diesel Rs 73.54 per litre — both lifetime highs in Delhi. The problem was exacerbated by rising crude prices and a falling rupee. None of the possible solutions subscribes to the populist easing of burden and the ruling NDA Government has tough choices and little negotiating room. Though options like reducing excise charged by the Centre and VAT by States are raised occasionally, a rupee cut per litre of fuel would impose almost a 10,000 crore plus of burden on the public exchequer. Neither the Centre nor the States has the financial strength or the will to adopt such a drastic measure. The second solution is to bring fuel under GST, difficult for any regime to implement given that it would reduce the Government revenue by about nearly two lakh crore rupees. It would put pressure on bottomlines and force correctives in other sectors, each of which may have their own rollover impact, mostly in terms of scaling down development allocations. However, some States are ready to take that hit. Besides, India, Japan and China are among the Asian countries that pay a higher price for procurement of crude from OPEC nations. This geo-political imperative called the “Asian premium” has no short-term solution too even if the countries were to cartelise and form a common crude buying mechanism. Lowering excise and passing some burden to oil PSUs is one thing but if the ire in France and back home has taught us anything, it is that some recalibration of established policy is needed urgently for the greater good.
Writer & Courtesy: The Pioneer