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BW Businessworld

Guilty Of Murders

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Y. Malegam, CA, has recently been in the news, including in this magazine. His is not a pointless name; it comes from Malegaon, a busy town of half a million near Nasik. It has an 18th-century fortress. Indira government's discrimination against the textile mills led to the emergence of powerloom centres all over Maharashtra; Malegaon is one of them.

Yashwant Sonawane, additional collector of Malegaon district, was driving down to Nandgaon for a meeting when he saw trucks parked near the oil companies' depot. He went to enquire; unluckily, it was the oil mafia he had run into. They beat him up and set him on fire. The undaunted officer caught hold of Popat Shinde, the gang leader, who was burnt with Sonawane and died later; it was his arrest that led to the discovery of the criminal gang.

That is not the first discovery. In October 2005, Manjunath Shanmugam, a young IOC officer, sealed two petrol pumps in Lakhimpur Kheri for selling adulterated petrol. When he went to inspect one of them a month later, six bullets were pumped into him. Monu Mittal was convicted for his murder together with seven accomplices. The government can take credit that in the cases of both Sonawane and Manjunath, it caught the murderers and put them in prison. After every scandal, it is the custom of those in power to chant the mantra, "Law will take its course." In these two cases, law took its course; those in power can rest in peace.

But the question has to be asked: is that enough? Should we see our promising, upright men murdered one after another, and feel happy if their murderers are caught and sentenced? Is this the best we can expect from the government? There was a moment in 2005 when the government itself did not think so. Such was the public uproar at Manjunath's murder that the Energy Coordination Committee, chaired by the Prime Minister himself, took up for consideration the issue of adulteration of petroleum products. He is known to be a stickler for honesty and efficiency, and six years is a long time to sit on any issue. It is high time that this venerable committee came to a conclusion.

There can be only one conclusion: kerosene subsidy creates nothing other than diversion, adulteration of diesel, and enormous illegal profits. Those who try to pursue or prevent them are liable to be killed, beaten up and otherwise silenced. For every Sonawane or Manjunath who suffers, there will be hundreds of officers who, to save their own skin, look the other way; many of them must be sharing the gains of the mafias they choose to ignore. The subsidy has not only created a criminal class; it has criminalised the officer class of oil companies.

If the Prime Minister and his committee get this far after six years, they will find it difficult to avoid drawing the lesson: that the kerosene subsidy needs to be abolished. True, it is a part of the love gifts that the ruling party showers upon the common man and is bound therefore to have some sentimental value. But the party should sometimes place the interest of the nation above sentiment; this is one such case. Apart from generating corruption, a commodity-specific subsidy is a poor way of subsidising the poor man. It subsidises only those poor who buy kerosene. Insofar as it is diverted, the poor do not get it. So even the sentimental intention is defeated. But even if some poor family manages to find kerosene to buy, its enrichment should not be conditional on its being a consumer of kerosene. If the poor deserve to be subsidised, they do so irrespective of what they buy.

What this really means is that it is not kerosene that should be subsidised, but the poor. The government gives them a number of subsidies, but each is conditional upon the poor doing or being something. The kerosene subsidy is conditional upon their consuming it, the food subsidy is conditional on their being close to a ration shop and getting a ration card, the employment subsidy is conditional on their finding a site where MGNREGA is offering employment, finding favour with a contractor who is working there, and doing manual work under a blazing sun. Good or bad, the government has already made lists of certified poor for each of these subsidies. It would be much simpler to put together all the subsidies and give them to those poor — without conditions, and without making them go through unnecessary hardships. Amongst other things, it will make administration easier and save the time of government servants. It will also save the lives of some who would otherwise go the way of Sonawane and Manjunath.

(This story was published in Businessworld Issue Dated 14-02-2011)


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bw opinion opinion subsidy policy oil mafia kerosene