What Could Be the Reasons for Unprecedented Petroleum Product Price Rise and Slow Covid Vaccination in India?

India is the largest populated nation in the world. It is a constitutional democracy where democratic system of governance has been in operation for the past over 7 decades. It is a federation of states where the central government and the state governments have powers to enact and administer laws in accordance with the written Constitution.

In the event of any disputes or contradictions in the laws, the Supreme Court of India is empowered to intervene to set things right!

Though democracy might be the best form of government for the best kind of people with reasonably high knowledge and wisdom, it may not be the case for a nation like India where the average Indian has not attained that kind of a stature so far!

In other words, the average Indian is a mediocre or perhaps below mediocre individual. For that kind of people, democracy deteriorates over time to yield governments by mediocre or below mediocre individuals! Unfortunately, the best kind of people though available in large numbers but less than the mediocre are often overpowered in a democracy that has adopted adult franchise as the democratic election process.

A nation with a complex population with varying individual or group understanding, likes and qualities, complexities in administration are quite natural. And when such complexities are dealt by a mediocre group of law makers, administrators, media and judiciary, the complexities of the nation are bound to rise with time. In such a democracy, people keep facing problems of various kinds continuously for several decades. They use their democratic powers to change their mediocre administrators but may not find success because they have only mediocre fellows to be selected as the replacements or their own mediocre abilities keep failing them from getting the desired outcome of good governance.

Indian citizens have been witnessing such a phenomena for quite some time. They felt that their government was not doing any thing to control prices of essential commodities such as petrol and diesel and the ministers in government talked and showed arrogance that they could not tolerate any more. That was the case prior to 2014 when the Indian National Congress and its allies in the name of United Progressive Alliance (UPA) were ruling the nation.

The Indians easily got carried away by the other major opposition group called the National Democratic Alliance, NDA, led by the Bharatiya Janatha Party or BJP. People believed what they told. The secular appeasement of minority religions of the nation by UPA was the reason told by BJP for rising prices and lack of opportunities!

So they voted the ruling UPA out of power and installed NDA to do good governance of the nation, in 2014! 

The new group in power on a fine evening declared withdrawal of certain currency notes in circulation, a step that is noted in history as the 'demonetization' step. The motivation for this step was told as for eliminating black money concentrations in the hands of many in the form of unaccounted cash. The idea was perhaps good, but its unplanned and haphazard implementation did more harm than good.

This one step caused great problems to millions of people in India. More than the direct problems it affected the lower level economic activities of the nation in an unprecedented manner. It caused unceremonious closure of millions of business activities of the nation which so far had been predominantly working on a currency based system. But no one ever noticed it as none had the ability to view the country as a whole! But it began to show in tax collections by the central and the state governments. But the mediocre administrators preferred to ignore the signs!

Some mediocre bureaucrats who happened to be near to the top administration of the political bosses in governance seemed to have advised the latter for the need of quick implementation of what is now known as the GST system of taxation for improving the falling tax collections! The new system had double advantages, they told the bosses! Most importantly, the new system would make all tax money to go to the central government account and the latter would later allot the states' share. It can be used as a whip to control those states ruled by those not liked by the individuals in the central government! Besides, the new system is fully computerized and that will make any attempt of tax evasion by any business fellow, impossible! Interestingly, the GST system was something that was adopted by several progressive nations that was getting planned for implementation by the Congress led UPA government and vehemently opposed by the BJP when not in power.

But when BJP led NDA captured power and formed the new government in 2014, they immediately seemed in agreement with the previous government. This happens because in several instances, the policies are framed by the bureaucracy which for all practical purposes remains the same.

So the new political masters hastily approved the idea without much thoughts or preparations. The mediocre bureaucrats implemented it too quickly by issuing orders after orders. They never gave any thought of the practical difficulties that would be faced by the good majority of remaing business community with so many complex rules and procedures to be adopted by them! The illustrious individuals in the government considered it unimportant to make the business people understand the system and get experienced with it! They simply thought that harsh punishments and fines would make every one fall in line too quickly! So the GST system of commercial taxation was adopted in a fully digital and networked system by executive orders. It had to be operated with faulty or inadequate computer network, server computers and perhaps a hastily made up software system!

This caused havocs to millions of small and medium scale business groups to the extent that their operating profits and cash flows got affected adversely. Many businesses that survived the demonetization a few months earlier now became unviable and became sick in a matter of months! Perhaps only the large businesses with enough resources could overcome those quickly. The bureaucratic and political individuals in governance paid little attention to the falling tax collections. They simply didn't do much to help the tax payers overcome the difficulties due to unplanned administrative actions. They failed to save the businesses who were earlier paying handsome amounts as both income and commercial taxes!

The cascading effect of this was closure of millions of businesses, both manufacturers and traders. Yet none thought it important to look in to it!  The effect was not immediately visible to the public. But it was clearly visible to the government. Their tax collections were falling drastically!

But how can a group of mediocre people in governance admit their wrong decisions? Only high caliber people are broadminded enough to admit follies. Mediocre people are highly egoistic in nature. They can never ever admit their own mistakes! When they are too reluctant to admit mistakes, how can they ever look for rectification of mistakes?

Due to corruption, inefficiency, wrong policies, high ambition to enhance military and policing have been causing Indian governance a high cost affair. Indian governments have not been able to have enough resources to fast forward economic development to satisfactory levels comparable to other nations with good infrastructure, social security, healthcare, literacy, employment opportunities and reasonable per capita income. They have been with ambitious plans without enough monetary resources to implement the plans properly in time. Regretably, those in key administrative positions never made any proper plans for having a balanced budgetary roadmap for governance!

They seemed to ignore the fact that a robust economic stability is essential for the governments too to gain financially. Heavily taxing the burdened economy was the only method they knew!

And that constrained the economic activities of the nation. When people have lesser incomes, they cut spending on goods and services that are not so essential. That in turn causes downward shift in the markets affecting business profitability. In turn tax collections too get affected adversely.

To add to the woes of the Indian economy, the Covid-19 lock downs also came into effect in 2020.

So the Indian government and consequently, the state governments have begun to lose revenue and income by way of tax collections. Instead of quickly adopting rectification of the problem, they preferred to adopt other methods.

And one such other method was enhancing the taxes of essential commodities like petrol, diesel, gas, aviation turbo fuel etc. The high taxation on the other hand are making more and more businesses to become unprofitable and unviable.

So now India is in a vicious circle. It is increasing the taxes for enhancing the governments' income without attempting any thing to reduce its several wasteful expenditures. The higher taxes are reducing the profits of businesses and their tax contributions.

That's making the government to increase taxes further! That in turn is making prices of all commodities to rise in an unprecedented manner. Covid lockdowns for over an year has almost caused drastic reduction in the income of people in the unorganized sector. In turn their spending too has come down affecting the markets.

As profitability of several corporate entities got affected, performance linked pay hikes of majority employees got adversely affected. 

Employment opportunities in India fell drastically! Unemployment is rising!

All these have drastically affected the financial stability of the central and state governments. They are constrained to spent money for essential things like buying Covid vaccines for the people in a timely manner. But like a brave head of any ruined family they're showing a brave face by borrowing from all sources known! 

Where are we going?

Who has got the courage to bell the cat?

If you ask me, only the people have the power for that. Indian people have to think while electing their representatives such as members of the parliament or state assemblies. They have to use their precious democratic power to make the individuals in politics and bureaucracy to do the service of proper governance wisely and for the benefit of the nation and its people.

They should learn to reject people without character, competence, compassion and courage who are fielded by political gangs for getting elected as their representatives. They should learn to reject people who are merely slaves of their political bosses who play from behind the curtains!

They should support political parties who have logical manifestos for making overall improvement to the nation rather than those with vague or twisted agendas.

Most importantly, the people should use their common sense to weed out evil political outfits who adopt all kinds of tricks to fool people to capture the power to govern the nation to fulfill their own vested interests rather than the nation and its people!

When that's done, India will have good governance by good people who would be in a position to find out and implement better methods of administration.

Such a government in India, like several other better governed nations, would not be required to tax people to suffocation! Such a government in India would use every rupee collected judiciously for the welfare of its people!

Indians would  then be proud of their democracy and no more would be cursing the demoncracy that they have been subjected to so far!

Is there any hope?