Debate on the Issue – A Brief History
In India, simultaneous elections to the Lok Sabha (House of The People) and Vidhan Sabhas (State Legislative Assemblies) were organized in the years 1951-52, 1957, 1962 and 1967. Thereafter, however, the schedule could not be maintained and the elections to the Lok Sabha and the Vidhan Sabhas have still not been realigned.
The next General Election to the Lok Sabha is scheduled for 2019. Elections for the Vidhan Sabhas of 5 States are scheduled for 2017, for 13 States in 2018, for 9 States in 2019, for 1 State 2020 and the remaining are scheduled for 2021.
The issue of simultaneous elections was debated by the Law Commission in its 107thReport in 1999 (Reform of Electoral Laws) , where in it was mentioned that – “The rule ought to be one election once in five years for Lok Sabha and all Legislative Assemblies”.
Recently, Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice presented its 79th Report on ‘Feasibility of holding Simultaneous Elections to the House of People (Lok Sabha) and State Legislative Assemblies’ on 17th December 2015.
Several structural changes will need to be done in case a decision is made to conduct simultaneous election, including possibility of Constitutional amendments to Articles 83, 172, 85 and 174 to streamline the process.
Analysis:-
Simultaneous elections to the Lok Sabha and Vidhan Sabhas – the prime minister suggested it some time back, and recently the president voiced his support for the idea too – are back on the nation’s agenda. To take it forward, the government has sought the opinion of citizens on the issue through the MyGov digital platform.
In an interview given to CNN-News18, Prime Minister had said that simultaneous elections to the central and state legislatures would aid governance.
If nothing, this step would at least allow elected representatives a longer, and hence more appropriate, time-frame to evaluate public policy. Currently, from the politicians’ side, public policy evaluation is captive to electoral cycles and verdicts.
An elected representative is forced to evaluate policy not on the basis of its outcome, but on the basis of its real or perceived political fallouts almost every year. In the current system, national political parties in power are forced to do this many times in a tenure of five years (not counting by-elections), and regional parties at least twice.
One effect of this ‘electoral’ evaluation of policies is that some economically good policies are killed while still in infancy, and the bad ones continue.
For example, the reforms initiated by the Narasimha Rao government in 1991.In ‘1994, when Congress lost the assembly elections in several states, Rao decided that inflation was the thing to focus on, liberalisation be damned’.
Reforms, which ideally should have been given a longer time to play out, were underplayed too soon. Since then politicians have been unwilling to sell reforms due to short-term electoral consequences.
This is not to argue that ministers always tend to make wrong public policy choices. But the first task of a politician is to seek and maintain power; sound logic and economics comes second.
So, in a good policy vs good politics trade-off, it may be that ministers side with good politics even while knowing fully well that they would have to sacrifice sound policy.
Simultaneous elections to the central and state assemblies give ministers and representatives a longer period—five years in India’s case—where they can focus only on policy and not be weighed down by politics. Free from the fear of polls and vote-banks for five years, policy evaluation can then be taken up through the appropriate tools.
In purely economic terms, there are some policies for which the short-term political costs are too high. The simultaneous elections idea would go a long way in eliminating those costs.
This is not to say that there will be no hiccups in the idea of simultaneous elections. Here are some possible hurdles.
First, what happens if a government, state or central, falls? This will de-sychronise elections again. So provisions may have to be made that even if governments fall, a new coalition must be elected in its place, even as a stopgap.
Second, during the changeover period, some state governments will have an extended life and some shortened ones, in order to hold the first of the elections simultaneously. States which face a shortened tenure, will protest. So the changes will clearly have to be negotiated in advance with major national and regional political parties.
The key to simultaneous polls thus, is political consensus.
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.