Monday, August 19, 2013

Auto fuel subsidy the cause of India economic collapse

Free of wheels: "A substantial proportion of India’s balance of payments deficit arises from its insatiable thirst for imported oil. Oil prices, which are largely determined by the government, are just about a third of what they are in Europe. The difference is not due to any difference in oil import prices; it is not the case that Arabs sell oil to their eastern neighbour any more cheaply than they do to Europeans. The low prices are entirely due to low taxes. If the Centre raised duties on liquid fuels, people would use public transport more and make fewer trips by car."

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