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Thursday, November 8, 2012

The 7th Gas Cylinder: More Intricacies In The Curious Story!



Determined to end the policy paralysis engineered by the opposition political parties the Government of India ushered in a spate of reforms, first opening up the Indian multi-brand retail market for Foreign Direct Investment (FDI), and then hiking the heavily subsidized diesel prices and putting a cap on subsidized cooking gas (LPG) cylinders per household per year. Hiking LPG cylinder prices was considered too risky.

Every household in India thus could get only three more cylinders from September to March this financial year, because the cap of subsidized cylinders was fixed at 6 per household per year. The 7th cylinder at market price became the most expensive proposition thereafter and as the Indian families focused on their kitchens the opposition parties got another excuse to ‘safeguard’ the interests of the common man.

The Government was also determined not to bow down to pressure and refused any rollback. The growing fiscal deficit had to be reduced for the long term interest of the country and the Government was also sure that the poor families and most of the middle class households do not in fact need to go for the 7th cylinder. With calculations in place the Government did not mind giving in a concession to the effect that state governments of the India could, if they prefer, consider increasing the cap of subsidized cylinders to 9 for below poverty line citizens. Naturally the clamor increased for implementing this provision to again help the common man. 

The Government of Maharashtra state finally decided in principle to increase the cap to 9 cylinders yesterday in Mumbai, but it came with two interesting conditions. First, only households with annual income of 100,000 rupees or less can get this concession. The cut-off point for annual income decided upon not exactly below poverty neither above poverty. Second, if such a household ends up using 7 cylinders in this financial year (April’12 to March’13) it will get only 7 cylinders next year and will get 9 only if they end up using 9 or more. The kitchen calculations get more exciting and intricate. With two months given for implementation the gas agencies run by the oil companies can find themselves in a web of intricacies too.

But no harm done to the Government of India’s financial resolve and at the same time opposition or even coalition partners get effectively silenced as the ‘common man’ stands to benefit, no matter who finally gets or does not get what benefit.  






The 7th gas cylinder has somewhat become a symbol of the country’s struggle for economic stability! 

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