Bharat Bandh uncalled for

05/07/2010

Increase in diesel, petrol, cooking gas prices should lead only to a marginal or negligible increase in overall prices as:

a) The price of diesel was increased by Rs.2 per litre i.e. by around 6%. The cost of diesel in the truck freight charges is only about 40-50%, the balance being the cost of driver, cleaner, depreciation and profit margin. Thus the freight charges should increase only by about 2.4% – 3%.

 b)transport charges in the retail cost of any product is only 5- 10%, the major components being cost of raw materials, interest rates, depreciation, profit margin, wages & salaries, tax, advertisement charges etc. Thus the fuel price increase should lead to general price rise of just 0.12 to 0.30% i.e. if the retail price of a product was Rs.100, it should cost now only Rs.100.12- Rs.100.30 i.e just 12 -30 paise more, which is definitely negligible.

c)In the case of  auto rickshaws, one litre of petrol gives about 25 kilometers for which the charges are around Rs.150. After price increase it could go up to only Rs.152 or just 1.67%.

 d)in the case of private use of motorcycles, assuming an average consumption of 10 litres (traveling about 800 to 1000 km) per month by a person with an income of Rs.20000 per month, his expenses on petrol will go up by just Rs.35 only i.e less than 0.2% of his income which again is negligible.

 e) cooking gas price has gone up by 10% but average consumption in a  family per month is just 1 cylinder or increase in expenses is only Rs.35 or less than 0.2% of the monthly income.

 f) overall additional expenses for a middle class family shall not be even 1% and this every one can easily absorb

 g) the interest rates had drastically come down recently(by about 4 percentage points) as a measure of reversing the economic slow down. Truck owners, auto rickshaw owners, and manufacturers who usually get finance from banks save a substantial amount on this account. They can easily afford to absorb the additional expenses due to fuel price increase, in stead of passing on the same to the customer. Even if they pass on the additional cost to consumer, consumer’s burden is negligible.

 h) the common man, who works under employment guarantee scheme got an increase of 25% in wages, from Rs.80 to Rs.100 three months ago. So he should not have any problem in meeting less than 1% increase in cost of living.

 i)the increase in salaries of central and several state government and public sector undertaking employees on account of 6th  Pay Commission as also income tax liberalization will enable employees to bear the additional expenses without any difficulty.

 In view of the above, it appears that Bharat Bandh is uncalled for. At the same time the government should restrain truck owners from increasing their charges/prices on the pretext of fuel price increase, beyond 3%, auto rickshaw owners and taxi owners beyond 2%, and manufacturers beyond 1%.


Duty to work

21/04/2009

Raj is an unskilled agricultural worker in the state of Tamilnadu. Five years ago, he used to work on an average for about 15 days a month. His daily wages then were Rs.60. Thus he used to earn about Rs.900 a month. His wife used to earn about Rs.400 a month. Their combined salary was Rs.1,300. This was not sufficient to run the family. So they used to seek work from potential employers, particularly during festive seasons as they needed more money for celebrating the festivals.

Today, the daily wages are around Rs.150 for men and Rs.70 for women. Raj and his wife earn Rs.1,320 in six days, more than what they would have earned five years ago by working for 15 days.

The prices of essential items have not gone up during this time. Actually, prices have come down in the Public Distribution System (PDS). One kilogram of rice is now sold at Rs.1. Prices of dhalls and sugar are also very low in the PDS ration shops. For festivals, all additional requirements of food items are sold at nominal prices in these shops. Raj also got cooking gas and stove free of cost. However, Raj’s family continues to use firewood. People like Raj are reported to allow their gas supply to be used by some others and in return, they get about Rs.200 from this transaction. Raj has also got a television set from the Government free of cost. He is expecting to get 2 acres of agricultural land also free of cost shortly in addition to house site.

Now there is shortage of labor in the agricultural sector. Raj can get work for a minimum of 20 days a month, on an average. But he does not want to work for 20 days. In fact, he does not work even for 15 days a month, as he used to work, a few years ago. He works just for 5-6 days and this is sufficient to run the family in the same way as he used to run earlier.

Raj does not see any change in his life style. But the country has lost production because of his idleness. His contribution to the country’s economy has come down by about 60% as he works only for 40% of the days he used to work. Assuming that the value of his services per day is Rs.150 a day and Rs. 1350 for 9 days (earlier he used to work for 15 days and now only for 6 days. The country has lost 9 days of his work). In other words, the GDP of the country has come down by Rs.1,350 per month or Rs.16,200 per year. Like Raj, there are about 1 crore people in Tamilnadu. The combined loss to the GDP of the state is Rs.16,200 crore in a year. In the whole of India, the additional output will be to the tune of Rs.259,200 crores in a year. The loss to the nation would be much more, if we consider that a person like Raj should work for about 25 days a month.

The grants and subsidies are depriving the nation output of approximately Rs.259,000 crores per year. If the policies of the government are framed in such a way that every able bodied person is made to work for 25 days a month and 8 hours a day, India’s GDP could surpass that of USA in the not too distant future.

In India, there is dire need to ensure not only EMPLOYMENT GUARANTEE BUT ALSO DUTY TO WORK.