The Left is against hiking retail prices of petroleum products. It won't support the implementation of Rangarajan Committee's recommendations either.
CPI(M) Nilotpal Basu sounded out this message to the government.
Clearly not happy with some of the government's economic policy, he says that the message from these elections needs to be heard and the policy regarding FDI in retail should be reviewed.
Excerpts from CNBC - TV18's exclusive interview with Nilotpal Basu:
Could you lay down what the Left' s role will be in the central economic policy making now?
Certain differences had cropped up earlier during the course of the last couple of years of the new government. We had decided to take up some of the comprehensive political issues. But as we were also busy with elections, we thought that it was better to postpone those discussions.
Now the elections are over, and we know as to what kind of economic paradigm can be of use the in economic development process in this country.
Together with elements of inclusivism and more equitable kind of development, we have to chalk out a development paradigm that will sustain it over a long- term period and where the poor and vulnerable will not be marginalised. Yet economic growth and further development could be achieved.
The one issue is of oil prices. Have you taken the final decision at your party level on what your response would be if there was a suggestion of raising oil prices now?
We already had a discussion. The leaders of the Parliamentary group of Left parties had met the Petroleum Minister a couple of days back. We have put across our views. We do not agree with the government regarding hiking the retail price of petroleum products at this point of time.
We feel that from the outset, the government's approach has not been very transparent. Fluctuation in the international prices of oil has not been linked in a transparent manner. The tax structure in the hydrocarbon sector is also flawed because international prices are going through the roof. Along with that, the tax mobilization from the hydrocarbon sector is also increasing, which makes more sense.
What exactly are your differences with the government?
It is the whole nomenclature of subsidy. For products where the cost price is, i.e., international crude price plus cost refining and transportation is only 40% of the retail price, and 60% is being raised as taxes, and the part of that not being recovered is being termed as subsidy. Now this in itself is confusing enough.
For other administered items, we have a different way of pricing. For this petroleum products, as it is a soft target for the consumer, we go on raising the prices. So the government has to come out with a calculation as to how much is the international price component and how much is the refining cost.
If a retail price hike is recommended, will you support it? What is your stand on the implementation of the Rangarajan committee recommendations?
Absolutely not. This whole approach is flawed. The government is accountable to the Parliament. There was a Parliamentary standing committee, which came out with very specific recommendations. The government failed to respond to those recommendations.
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