Subsidy Misuse

LETTERS TO THE EDITOR

This refers to the oil pool deficit, estimates of which are placed by different sources at bet-ween Rs 15,500 crore to Rs 21,000 crore. A large contributor to this is the diesel subsidy.The intriguing part lies in the fact that considerable amount of this flows towards the running of luxury cars and jeeps. It is surprising why the government is incognizant to the subsidy being used for this purpose.

To add to this, of late we have been learning of car majors proposals to come out with diesel versions of their models to boost sale. While the government expresses its inability to withdraw diesel subsidy on two counts viz., cost-push inflation spirals and kerosene-diesel adulteration, one wonders as to what stops it from introducing a mechanism to generate a compensatory revenue something like an excise duty on diesel vehicles, in excess of the present 40 per cent applicable to both petrol and diesel cars, which could at least stop the widening of the deficit?