The Banana Graph, Differential pricing and the Indian Budget 2019
The Great Indian Budget
On 1st February, Mr. Jaitly is going to present the Union Budget. Many are predicting that this will be his last.
That, of course, needs to be seen but currently, Hubby Dear and his cronies have already started discussing what changes the new budget will bring. Will it bring grief or will it bring relief to the masses? Will it increase taxes for the rich? Will it continue to punish the good-tax-paying, salaried citizens of India who have no choice but to pay up?
All these questions come to mind as I tot up my expenses for the month of January.
As usual, at the end of 2018, we had drawn up our own plan for revenue and expenditure. Unlike the Govt of India, our simple household has no means of increasing revenue as we are a single income family. So what we can do is control our expenditure.
But sadly, controlling expenses is easier said than done. Year by year, I find that prices of simple commodities have steadily risen till the simple fruit like the Banana is now quite out of reach of the common man. And not only is it out of reach financially, but it is also out of reach physically since the Green Indian Banana has become almost extinct. In its place, we have the Yellow Cuban variety known as Golden Banana sold on every street cart.
So today, I would like to write an Open Letter to our Finance Minister to help him draw up his Budget for the Year 2019-2020.
The Banana Graph
Dear Mr. Jaitly
I continued buying them despite the gradual price increase and my Uncle-in-law’s strong disapproval of this proletarian fruit that he’d scoff at, curling up his patrician nose and raising his eyebrows in disdain whenever he spotted the fruit.
Despite his diktat, I loved those tangy sweet and sour green Bananas. And so did my kids. Happily, we’d eat a banana each every single day and easily go through two dozen a week! But as our waistlines kept increasing, keeping pace with the price of bananas and the Green Indian banana gradually disappearing, this fruit was slowly eased out of my shopping list.However, with bananas now at around Rs 60 a dozen (and even more at times like Ramzan when the prices of fruit shoot up), I wonder which prole can really afford it. Is the banana still the common man's fruit? Click To Tweet
Bananas are not the only commodity reeling under inflation. I remember my dad filling up the car with petrol at Rs. 3.50 a litre. Today with petrol prices the way they are, I will seriously have to start walking everywhere( roads permitting!)
Discussing rising prices and increasing taxes with my Dad, he came up with this argument.
Look, he told me, when the price hike in petrol was announced I could see 2 distinct messages for Citizen Indian :
- The hike in the price is unavoidable because the Govt has to collect revenues to assist their ‘pro-poor schemes’
- We, citizens who can afford to spend, have no cause to grumble as 4% of the country’s population – the taxpayer – should have some thought for the aam admi.
Now while I agree with the above argument, what about those who do not pay any taxes ( not the 40% are below poverty line) yet many of whom can buy their vehicles for over 10 lacs and change them every 2 years or so. Shouldn’t they also have to agree to the above?
The argument for differential pricing
Then having consented to assist the Govt’s pro-poor schemes,won’t it be a good idea to have differential prices for petrol? Any owner of any vehicle costing more than 10 lacs petrol should be willing to pay Rs 200 / litre? (as one caller on a TV programme admitted the other day “provided the money collected goes to the aam admi.)
Isn’t it also a good idea to charge higher rates for petrol to owners of luxury cars like Audis, Mercs, Ferraris? As well as large petrol guzzlers and traffic blockers like SUV’s?
In conclusion you can thus kill ‘3’ birds with one stone- corruption, the problem of black money , and in the bargain help the aam admi.
This will not only raise revenues, weed out corruption and black money but actually save the 4th bird’s (he who has to commute in his own vehicle for lack of efficient public transport) burden.
Hey! Why didn’t our policymakers think of that?
The answer, I told my Dad, is quite simple, the policymakers themselves have SUVs, BMWs and other luxury cars not to mention a huge stash of cash – both black & white. ( Despite de-monetization). Besides, as I proved with the help of my Banana Graph, we soon get used to the new threshold of pain and still eat bananas at Rs. 60 a dozen.
But, dear Mr. Jaitly, please do think of the Common Man and the soon to be extinct Green Indian Banana that is indigenous to our native land. While taxes have to rise, please tread carefully. Else, if we don’t watch it, we could very well end up a Banana Republic