Predictable cacophony

Darius Nakhoonwala

Plenty of proof for this proposition came last week, when leader writers were asked by their editors to pronounce judgment on the price increases announced by the government for diesel and petrol but not LPG and kerosene. Each newspaper rode its favourite hobby-horse, although some would say it catered to its readers` tastes. I give a mere sampling below.

The Telegraph, as befits a newspaper that feels compelled to balance logic with middle class sensibilities, had the classic two-para edit. The first para dealt with economics, the second with other issues. Thus, it wrote, "the price hike… is a response to global market prices. But the extent of the hike is still not enough. The petroleum minister, Mr Mani Shankar Aiyar, admitted that only half the rise in global prices had been passed on to the consumers. Public sector oil companies will bear the other half of the increased burden." In short, some huge subsidies would continue.

So the second para regurgitated the received wisdom: "The real poor of India are not the consumers of diesel and petrol. The consumers of diesel and petrol are city-dwellers and the rural rich who can have no claims to government subsidy by any economic or political reasoning." Then came another piece of conventional wisdom. "The left should ponder what can be done with the money that is now being used to subsidize diesel and petrol prices. That money can be put to far better use to provide food, shelter, education and health facilities for the poor of India."

Unsurprisingly, the counter-view was provided by The Hindu which has become like the Pravda. There was no need to raise the price of diesel and petrol, it wrote, even by the extent they were raised. "The major point of contention is whether the government has distributed the burden equitably. From Tuesday consumers in most parts of the country ended up paying for their petrol and diesel much more than what the government`s announcements indicate." It then worried about the cascading effects and inflation. Therefore, it concluded, "It is unfortunate that the Government has failed to look at sensible alternatives suggested by experts and political parties before hiking the retail prices.

And what were these sensible alternatives? Since refining costs are lower in India, it said, "the Government should have persisted with its attempts to lower the tax burden on petroleum products." Which ones? Customs duties have been cut to the bone at 5 per cent. That leaves excise duties? Should these be cut? The paper did not say.

The Indian Express went on another tangent. "The BJP and the Left need our special congratulations for their new and absurd alliance. Sworn enemies, they suddenly find themselves on the same side of the fence in their opposition to the oil price hike. With world oil prices touching $59 per barrel, most people would agree that oil prices must rise in India. After all the country is not — as far as we know — located on a different planet." It then berated all political parties for playing ducks and drakes with oil prices. Nice, safe edit but in economic terms quite bereft.

The Business Standard, as is its wont, wrote as if the only thing that matters is the stock market. "The most telling comment on the increase in oil prices, announced at long last by the government on Monday, is provided by the movement of the IOC stock price, which fell on Monday as well as Tuesday, in spite of the Sensex rising smartly on both days. The market knows that the price hike is not enough to neutralise the increased prices of crude." Really? Wow!

As they say in Hindi films, "That is all, me lud."