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Politics and economics of fuel prices

As consumers we would like the fuel prices to remain low unmindful of the international crude price touching the roof. The consumer is least interested in the fact that the country has inadequate oil reserves. No matter how much the oil marketing PSUs bleed, we, the consumers, want fuel at affordable prices.

The question is to what extent and how much can the government subsidise the fuel prices? After all, there is a social cost of the huge oil subsidy bill, which may reflect itself in the form of a larger fiscal deficit, which itself is inflationary.

The government may have to squeeze the flow of funds to critical infrastructure development and ambitious schemes like Bharat Nirman and the Rural Employment Guarantee Programme.


There is yet another justification for the economic pricing of petroleum products, which is to keep the fuel demand in check. The larger the gap between the economic and subsidised prices, the higher the wasteful use.

The economic pricing of fuel has another peril in the form of inflationary impact. Any hike in the fuel price, especially diesel, is likely to further fuel the fire of inflation. It is a daunting task before the government to raise fuel prices without risking higher inflation.

Of course, some insulation from the price rise may be given to the public through the duty reduction on petroleum products. I would suggest that  instead of the ad valorem duties which are price based, the government should impose specific duties on petroleum products which are price neutral.

The complexity of fuel prices extends from economics to politics. The government is generally hesitant to raise fuel prices because of the fear of a public backlash and the Opposition is always ready to make political capital out of any hike. Though officially dismantled in April1, 2002, the administered price mechanism has continued and a decision on fuel prices remains a political issue.

  RAMA KASHYAP, MCM DAV College, Chanidgarh

PU’s fund crunch

Having served this university for decades since the days of its rehabilitation after partition, most members of the Panjab University Panckhula Residents Association have superannuated. Most of us have seen this university grow for a scratch after Lahore was lost in partition.

Our association with this university is so long that we fail to accept the kind of financial crunch this university is made to suffer in the absence of Central status.

A university which was one of the first few to be opened during British rule, a university that has been a premier citadel of quality research and teaching and a university that has attracted faculty from all over the country can no longer be allowed to suffer the financial crisis of the kind that has come to be associated with its existing status. This might prove to be suicidal not only for the institution but also for academics of the region.

R. C. CHANDNA, Panchkula


As a former teacher of Panjab University, I express my full support and solidarity with the faculty, students and officers’ campaign over the last several weeks for the university’s recognition as a Central university.

If granted, such status would reinforce its role in teaching, research and creating national awareness. It would also let the university get over its serious resource crunch that it is facing in the scenario of rising costs of higher education. Panjab University has to hold its high academic standing that it has held for more than a century.

I appeal to all votaries of Punjabiat, who constitute the state’s elite, kindly don’t kill Panjab University by denying it resources, that it can get only as and when the Centre underwrites its costs.


It’s shocking

The news “Punjab Vat Tribunal No 2 put on notice” (May 31) has stunned the judicial fraternity. The news vindicates the ongoing debate on corruption in high places. It also proves how public servants indulge in open corruption without fear.

The resignation from the membership of the tribunal is not enough. It amounts to the return of the booty by the thief when caught. All justice-loving people should endeavor to take the case to its logical conclusion.

K. SHARMA, Melbourne

Marking and making money

I know what I have to say amounts to washing dirty linen in public. But enough is enough. We talk of educational reforms, but we do not bother to understand real problems.

These days paper marking is going on in the Kurukshetra and M. D. universities, but the horror of evaluation is a sight which cannot be described in words; it has to be seen to be believed. The way language, science and commerce papers are checked is unbelievable.

The rules are being flouted with impunity. I remember writing “Teaching is a noble profession”, but my idealism bleeds when I see the behaviour of teachers who, during evaluation, become “shredding machines”.

They, like Oliver Twist, always ask for more. Some of them evaluate up to 100 papers in a day, which to my mind is not humanly possible in any subject, leave aside language and literature. The rules say not more than 40 papers per day should be checked.

Under the rules, ad hoc teachers are not to be appointed for evaluation work. But they do the evaluation and earn up to Rs 700 a day. Teachers who are not even familiar with phonetics are evaluating papers.

If a survey is carried out, you would find teachers have only tick-marked the papers because you cannot read all of them in such a short time. Besides, if you read, you would at least circle the mistakes, which they don’t.

MUKTA, Sonepat



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