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Govt indulging in accounting jugglery, benefits of int'l oil price drop not given to people: Congress

By FnF Correspondent | PUBLISHED: 23, Jan 2018, 17:57 pm IST | UPDATED: 26, Jan 2018, 18:49 pm IST

Govt indulging in accounting jugglery, benefits of int'l oil price drop not given to people: Congress New Delhi: Coming down heavily at the Modi government on rise in oil prices as a result of which the benefit of international crude oil prices coming down not being passed to the people of India, Congress said the Modi Government is indulging in cyclical economics.

Addressing reporters Dr Abhishek Manu Singhvi, Congress spokesperson said, ONGC and HPL merger is a classic case of accounting jugglery and will only add to the rising fiscal deficit. It is another way of using left-hand right-hand slieght of hand to largely fool the Indian public.
 
Dr. Singhvi said, first the Modi Government has reaped a wind fall gain of almost Rs. 6 lakh crores, is the gain it has had by sheer taxation of Petrol and diesel namely if it had passed on the benefit to the public of India of the actual international oil prices at which India imports which is the price given to Indian public either directly or by subsidy, then the Indian public would have gained by Rs. 6 lakh crores. Instead the Modi Government has taxed and collected tax from Indian public of Rs.6 lakhs crore and has not passed on the benefit of low prevailing international prices for over 3-1/2 years to the Indian public. On the one hand, international prices have declined to a low of 47 odd US Dollars, it is has not come back to some 62 US Dollars. He said, during our time, it was 110 US$. At one time even at 150 US$ and yet while the international prices are in the ranges of US$ 45, 47, 50 and 62 , the Modi Government has not passed on that benefit and prices are falling but prices of petroleum products in India are rising.
 
Dr Singhvi  elaborated, 'In the context of oil and petroleum – Point No. 1 - for the first time in India’s history a cash rich Government controlled virtually 100% Government controlled ONGC is going to take a loan to buy the Government owned shares in another Government controlled company HPCL. So Government’s own shares in ONGC, it also owns shares in HPCL. To do accounting jugglery, it is ONGC in all probability with the loan of odd Rs. 30,000 crores. So ONGC will take a loan of Rs. 30,000 crore, pay it to the Government of India to buy the shares of Government of India in HPCL. Why – so the Government of India can fool the public of India by showing that we, the Government of India has not taken loan. Our deficit look good, our borrowings look small but they forget that the borrowing is done by the 100% Government of India Company called ONGC and this is being done to make the balance sheet of the Government of India before Budget look alright that we have not increased borrowing. Forget whether the government of India has increased its borrowing or ONGC increases the borrowings, the money comes from our pockets.
 
Secondly, Singhvi said, it is done to show that the disinvestment target of the Government of India is met. In the first year the Modi Government missed the disinvestment target by 44%, they did disinvestment less by 44%. In the second year, they did it less by 41 or 42%. In the third year, they missed and did less by 20% i.e. 2016-17. Now in this year, to show that we have done some disinvestment, they are technically disinvesting their shares of HPCL but disinvesting it into another public sector ONGC. Is this the disinvestment you are talking about or thinking about? This is the usual Modi Government’s style of jugglery.
 
Thirdly, he said, this is done by getting ONGC to take a loan because the ONGC Chairman Shekhar announced two days ago that the borrowing limits of ONGC are increased to Rs. 35,000 crore is our allegation and a fair guess that this borrowing limit of ONGC is increased to enable ONGC to take loans of up to Rs. 30-35,000 crores. The purpose of taking the loan is to buy the Government of India shares of the Government of India which the Government of India owns in HPCL.
 
Fourthly, what is the change on the ground? Does it really have a change in the ground? On the ground, the HPCL which is either a refinery agency or a trading agency in oil remains the same. On the ground ONGC remains the same, it is an exploration agency, oil extraction agency. All that will happen is that HPCL instead of independent company will become either a department or a subsidiary of ONGC. What synergy is achieved by this? Nothing but jugglery – if ONGC and BPCL had synergies, then for the last so many decades, why was ONGC and BPCL separate companies because they do different activities and they continue to do different activities. Only difference is that ONGC will own BPCL. Why does Modi’s Government wants the balance sheet to look better that Government of India has not borrowed plus we have fulfilled our disinvestment target, Congress Spokesperson said.
 
Reminding that from 2013-14 when the oil price was 105. 52 US$ per barrel and from 2004 to 2014  Dr Singhvi said, UPA gave fantastic growth despite oil prices. He said, last year before Shri Modi’s arrival  prices were 105 US$ per barrel. The price during Shri Modi’s time in 2015-16 went down to 46 US$ per barrel, that is more than 60% bonanza jackpot he got from 160% reduction. In the next year, it kept at 47 US$. In the current year, it is become US$ 68 – some increase but we are talking of our times when we had to import oil at 105 US$ per barrel and your time you have got largely US$ 47–50 US$, now it is US$ 68. Should the Government of India have passed on some benefit to the poor ordinary people of India or not?, he asked. You are getting oil at 47 US$ or 68 US$ now.

Singhvi said, 'I can understand you are charging the Indian public little more or equivalent to US$ 75 per barrel. Now just compare – when 46 US$ was the low price of crude, our prices were all time high per liter – Rs. 66 per liter. Secondly our time it was Rs. 64, then it became Rs. 71, now petrol is Rs. 80.10 in Mumbai. 22nd January price of per liter petrol in Mumbai is about Rs. 80, it may be one or two Rupees Up and down. Diesel from 52 to 62, went down to 59 and is now in Mumbai price on 22.1.2018 which is today, it is 67.10 per litre.'
 
Calling it chicanery, Congress spokesperson asked, isnt this virtually pulling wool over the eyes of the Indian public? Isnt it trying to make fool of the people of India by suggesting that they eat grass? Is it an attempt to do accounting jugglery, is it an attempt to do left hand-right hand jugglery, transferring from left hand to right hand. These five questions arise in the context of five issues. Doesnt it prove that you have simply directed the ONGC to buy shares of HPCL so the Government of India is shown to have met its disinvestment target? This disinvestment means disinvestment to ONGC. Was this the meaning of disinvestment? Secondly, the govt is forcing ONGC to do borrowing of Rs. 30,000 crore so that the Government does not have to borrow. Thirdly, you are likely to have, according to Morgan Stanley report, a fiscal deficit of 3.5% of GDP over shooting the Budget Estimates of 3.2%.
 
Fourthly, you have not passed on a penny of the benefit of reduction of oil prices by way of reducing petrol and diesel prices to the people of India who continue to reel under the highest diesel and petrol prices virtually in the whole world. In this difference of the International price and the price at which it is sold to the Indian public, the Government of Modi has pocketed Rs. 6 lakh crores.
 
Dr. Singhvi said have you heard what is the prices of petrol Rs. 71 per liter, Rs. 62 or 63 per liter diesel - we have demanded officially many times that one of the worst ways you have distorted GST is not to accede to our demand of bringing GST. What is this talk about One Nation-One Tax? You have got a Nation with not even one tax, two tax, three tax, out of the tax system altogether of GST. If you had GST, could you levy Rs. 71 including Diesel also in it?
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