A Farsi story- may be a 'Persian Nights'

Iran's Capital Tehran's Skyline in Night

The entire thought came from THIS article about the economising of subsidies in Iran, which came in the newspaper ‘Daily News & Analysis’ or DNA.

* http://www.dnaindia.com/money/report_how-to-remove-subsidies-and-not-hurt-the-poor-iran-offers-lessons_1564439-all

I am sure many of us might have heard a recent news about our government planning to cut down the subsidy being given to LPG cooking gas.

For the uninformed, the concerned ministries are planning to cut down the number of cooking gas to 4 cylinders per year at the current subsidised cost of Rs.400  per cylinder (and that too only to the below poverty line or BPL families having the Aadhar UID card). For additional cylinders and for people above poverty line - the ridiculous LoC drawn by the government in 'poor rich' country- will have to pay Rs.800 per cylinder.

Now that might come as shock to many and for those of you wondering the wisdom of having to cook with a 14.8kg gas for a family of 6 (average size of family in India) for 3 months, you will pinch yourselves for that thought since at least 35% (by government count) goes to sleep having just one square meal per day (i am sure square is not the word, may be  a decimal point meal!). So not much to eat then what you cook, got it!.

Now the logic government is giving is that by subsidizing the gas at Rs.400 per cylinder government wastes a lot, since even Mr. Mukesh Ambani can also buy gas at Rs.400/cylinder and any number of cylinders at that price, if he cooks with gas from government (not sure the KG gas flows there too J), in his 10K crore worth mansion ‘Antilia’  facing the slums!. Pretty reasonable logic and one cannot find it silly for the government’s decision given that Govt is trying all the best to bring the fiscal deficit to under 5% this financial year. Even ministers and babus are asked to tighten the belt in the newly favourite word ‘austerity drive’ and are to cut down on foreign tours and conferences in 5star hotels. Come on when our leaders are cutting down why not our genuine citizens?

So this is one of the series of pricks (or may be better to call stabs for the effect they do) a common man has to take to contain deficit (which the mango man rarely understand what it is) and to avoid a Greece like situation where we go begging for money like our great neighbour.

Ok, logic is fine, but i am sceptical about the outcome. I don’t know whether the babus eat outside or travel in hired taxis, but we mango men often do (and as a ‘lazy’ bachelor, i do it religiously). Immediate effect of hike in fuel price is reflected in the dosas, or ‘thalis’ we eat. I somehow fail to understand the connection between the dosa and petrol!, but they go hand in hand. And not to mention the taxi fare, and room rentals. Of course we have given a very generous name to it as ‘inflation’, and which is projected as something we mango men do not understand other than while taking cash from the ATMs (for the lucky ones with money in it)

Agreed subsidies are not sustainable in a market economy, nor should the ambani’s have gas at mango mans cost. But why not increase tax on avoidable things such as liquor (forgive me drunkards, for you are the true souls who lay your lives to pay tax for government), cigarette, cars, SUVs, imported personal aircrafts, yachts etc.  If one is buying a car he/she should pay for it and for the fuel for others sake who takes in the pollution.

Now there is very interesting case of a country like ours, Iran, where similar issues were faced. Petrol was equivalent of Rs.4 (yes only one digit) and diesel was some 60 paise (do we have coins still?). The same issue of rich getting subsidised at poor’s cost were there. But Iran used a very nice strategy to cut down on subsidy and to improve the living standards without hurting anyone.

Obviously, it cannot be worked out in a country like ours (where scams are more popular than Rajani movies) and with a population 20 times of Iran. Iran with a mere 7 crore population (equivalent of Andhra Pradesh) and sitting on an oil gas rich area need only to be a welfare state doling out facilities to public. But what i liked is the effort from their side to transform their country (just 3 times our Per capita income, and in many aspects currently similar to ours, but better) in the middle of all these sanctions. I don’t know how much to trust the article, but if one goes by, i wish if we had such luxury in our own country. Pls do take the time to read...

Courtesy and article copy right: ©2011 Diligent Media Corporation Ltd.    Photo courtesy: wikipedia

http://www.dnaindia.com/money/report_how-to-remove-subsidies-and-not-hurt-the-poor-iran-offers-lessons_1564439-all