The Excise, VAT and other taxation accruals from the oil sector are of the order of Rs 2,35000 cr whereas the subsidy burden is to the tune of 1,85000 cr. Through the subsidy or doles to the oil companies to cater for their under recoveries, these companies manage hefty profits a major portion of which accrues to the government in the form of dividend. ( in fact government received Rs 20000 cr as dividend from these companies in the last two years ). No doubt the Indian oil economics over the years has been the goose that lays golden eggs for the government kitty, it is likely to become an eternal bane of Indian economy and Indian growth story in the light of finite nature of oil availability on our planet, the ever increasing requirements of mankind and the awareness amongst the oil producers to milk their limited resources to the maximum.
While the government can neither afford to lose its oil revenues nor pass on even partial burden to the public at large because of compulsions of dirty coalition politics and requirements of vote politics.But it surely can resort to minimizing the effects of oil economy on Indian growth story through following time tested steps guided by reductions in imports and decreasing subsidy burden to control both current account deficit and fiscal deficit.
- Cutting down Oil wastages and needless subsidies
- Toll barriers and slow speeds : Delays at toll cost Rs 87,000 crore every year as per the survey to be released by road ministry out of which the fuel loss is a hefty Rs 60000 crores with an additional subsidy burden of about Rs 20000 crores.
- The subsidy cost of pilferage, theft and kerosene consumption by other than the target group is of the order of Rs 25000 crores.
- The LPG earmarked for domestic use finds its way to all kind of commercial activity leading to a gross subsidy of Rs 50000 cr.
- Out of the total diesel subsidy of Rs 1.05 lakh crore, the goods vehicles account for 37.9% and agriculture sector accounts for 18.8% which is desirable. The rest consumed by taxis, cars, other private vehicles, three wheelers, power, industry, railways, defence and others should not have access to subsidised diesel. A saving of about Rs 45000 cr can be easily achieved without any major effect on inflation.
- Use of Biofuel Blends
- Urban Transportation Infrastructure and System