While the government’s diesel subsidies were meant to help the needy, its widespread use by all classes has had a deleterious effect on health, leading to an alarming rise in pollution levels.
By Priyvrat Singh Chouhan
Mahatma Gandhi once said, “Speed is irrelevant if you are going in the wrong direction.” This seems to be the case with India. For a long time now, government policies were aimed at helping the corporate sector burgeon, providing subsidies to automobile, telecom and other sectors, and showing higher economic growth figures as achievements. Governments changed but the story remained the same. This short-sightedness has even extended to how they tackle diesel subsidies.
In a PIL filed in the Supreme Court, Dr Arvind Gupta, founder trustee of Indian Investors Protection Council (IIPC), said that by providing subsidies on diesel, the government had promoted “the dirtiest fuel” and caused dieselization of private vehicles. It had encouraged polluters, leading to a menacing decrease in air quality across the nation and hazardous levels in metros. The petitioner sought immediate enforcement of Euro V emission standards across the country and discontinuation of extension of diesel subsidies indiscriminately.
When the petition was filed way back in 2012 (it came before the chief justice’s bench in December 2015), it brought to light India’s position globally, according to the Environment Performance Index of Yale University. India was ranked a dismal 125th. This should have been a wake-up call for India’s leaders to take some drastic measures to tackle environment. But as nothing was done, India tumbled to 155th spot out of a total 178 countries in the 2014 report. Shamefully, it even lagged behind most of its neighbors, including China (118), Pakistan (148) and Nepal (139). What was more alarming was India’s air quality score, which was 23.24 out of 100 and ranked 174 out of 178 countries.
Coming to diesel, India is in a peculiar situation. The primary reason for diesel being highly subsidized and regulated here is to protect the interests of farmers and consumers so that food and essential items are affordable and accessible to people. After all, diesel is extensively used in farm operations, transport of food grains and fertilizers. Any increase in diesel price by way of taxes and duties will have an immediate cascading effect on the affordability of staple food to the masses, especially the poor and middle class and will push up inflation.
Lower tax and a subsidy of more than Rs 10 on the sale of each liter of diesel have resulted in a big gap with the retail selling price of petrol. The difference between the market price of petrol and diesel is as much as Rs 25. In no other country is there such a disparity. In fact, in countries like the US, the market price of diesel is higher than that of petrol (gasoline). Though diesel subsidy in India is meant only for the needy, it is also available to everyone, including sectors such as luxury cars, telecom, malls and supermarkets.
While the world diligently follows the “polluter pays” principle, in India, it seems to be the case of “polluter is subsidized” principle. Indiscriminate subsidization proves a boon to privileged classes, who eat up a part of it.
According to the Centre for Science and Environment, it is estimated that out of the country’s total consumption of diesel, 10 percent is used by industry, six percent by the Railways, 12 percent by the agriculture sector and 15 percent by private car owners. Another eight percent is used for power generation, while buses and trucks consume 12 percent and 37 percent, respectively. With the price of crude oil rising high and putting pressure on the economy, even the higher classes are using diesel vehicles, leading to rapid dieselization of private cars.
While the government’s justification for providing subsidies such as diesel is that these keep the prices of essential commodities low, what it chooses to ignore is that diesel use leads to increased pollution and has a deleterious effect on health.
In purely economic terms, this is taking a huge toll on the country. According to a 2013 World Bank report, India spends three percent of its GDP annually on treating health issues caused by air pollution and the total annual damage because of the environmental degradation is 5.7 percent of the GDP. Chances are that these numbers having only gone up. According to the WHO, air pollution is one of the main avoidable causes of disease and death globally. About 3.7 million deaths a year are attributed to ambient (outdoor) air pollution, it said.
In this regard, the PIL filed by Dr Gupta raises some crucial issues and should be heeded. After all, we can’t afford to keep living in a gas chamber.