The Supreme Court, recently, did the right thing by terming as serious the allegation by a petitioner that three crore ration cards were cancelled for not being linked with the Aadhaar database and that these were connected to reported starvation deaths in some States.
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The unique identification scheme has been in existence for more than a decade and recent data has estimated that nearly 90% of India’s projected population has been assigned the Aadhaar number.
Following the Court’s judgment in 2018, upholding the Aadhaar programme as a reasonable restriction on individual privacy to fulfil welfare requirements and dignity — a 4-1 majority Bench had also rejected a review petition in January 2021 — questions about the scheme’s validity for public purposes have been put to rest.
But that has not meant that concerns about the failures in the use of the identity verification project have been allayed. These include inefficiencies in biometric authentication and updating, linking of Aadhaar with bank accounts, and the use of the Aadhaar payment bridge.
With benefits under the PDS, the NREGA and LPG subsidy, among other essentials, requiring individuals to have the Aadhaar number, inefficiencies and failures have led to inconvenience and suffering for the poor. There are reports that show failures in authentication having led to delays in the disbursal of benefits and, in many cases, in their denial due to cancellation of legitimate beneficiary names.
The government had promised that exemption mechanisms that would allow for overriding such failures will help beneficiaries still avail subsidies and benefits despite system failures. That has been the response by the government to the recent petition as well, but reports from States such as Jharkhand from 2017, for example, suggest that there have been starvation deaths because of the denial of benefits and subsidies.
Biometric authentication failures are but expected of a large scale and technology-intensive project such as the UID. Despite being designed to store finger and iris scans of most users, doubts about the success rates of authentication and the generation of “false negatives” have always persisted, more so for labourers and tribal people.
Those engaged in manual and hard labour, for example, are susceptible to fingerprint changes over time. In practice, beneficiaries have tended to use Aadhaar cards as identity markers but there have been instances of people losing cards and being denied benefits.
Given the scale of the problem, the central and State governments would do well to allow alternative identification so that genuine beneficiaries are not denied due subsidies. The question of fraud can still be addressed by the use of other verification cards and by decentralised disbursal of services at the panchayat level.
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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.