1. How boiling oil prices Impact Budget
- India is the world’s third largest oil importer. It imports 86% of its crude oil requirements to make the petrol and diesel.
- Iraq is the top oil supplier. Saudi Arabia, UAE, Nigeria and the US are other key sellers. Therefore, any geopolitical tension affecting the supply of crude oil does not bode well for Indian consumers as well as government finances.
Reasons:
- Rising tensions between Russia and Ukraine are leading to a surge in oil prices, with Brent breaching the $90-a-barrel.
- Crude oil prices have risen sharply since the beginning of the year as a surge in Covid-19 cases around the world owing to the Omicron variant .
- Key oil-producing countries have also kept increasing crude oil supplies despite rising demand.
- OPEC+ had agreed to sharp cuts in supply in 2020 owing to Covid-induced travel restrictions, but the organisation has been slow to boost production since then.
Impact:
- Rising prices feed into inflation.
- Increases the amount of LPG and kerosene subsidy the government is required to pay.
- On the positive side, government revenues on taxes of oil and related products have also been rising over the last two years- High inflation will force the government to cut taxes on oil and related products.
- The Oil import bill is already up by more than 70 per cent from last year and it affects the balance of payments adversely.
2. To the poll booth, with no donor knowledge
In late 2021, Union government authorised State Bank of India to issue and encash a new tranche of electoral bonds, 19th since its launch in 2018.
Criticisms of electoral bond:
Electoral Bond is a financial instrument for making donations to political parties.
The bonds are issued in multiples of Rs. 1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh and Rs. 1 crore without any maximum limit.
State Bank of India is authorised to issue and encash these bonds, which are valid for fifteen days from the date of issuance.
These bonds are redeemable in the designated account of a registered political party.
- Not transparent: denying citizens the right of access to information, especially material on political funding.
- Political parties have no obligation to provide details to the public on each donation received by them through electoral bonds.
- Amendments have been made removing a previous prohibition that disallowed a company from donating anything more than 7.5% of its net profits over the course of the preceding three years. This can act as a channel for blackmoney.
- Because the bonds are purchased through the State Bank of India (SBI), the government is always in a position to know who the donor is.
Government’s argument:
- Government of India (GoI) said that voters have no fundamental right to know how political parties are funded.
- Only parties registered under the Representation of the People Act 1951 could receive donations through electoral bonds, and they also should not have secured less than 1% of the votes polled in the previous elections.
- Only white money is involved in the Bonds as the amounts are paid only through cheque or demand draft.
- ECI claimed that the scheme is one step forward compared to the old system of cash funding, which was unaccountable.
Role of judiciary:
- Supreme Court has consistently held that voters have a right to freely express themselves during an election.
- Voters are entitled to all pieces of information that give purpose and vigour to this right.
- Bombay High Court predicted that any decision to allow companies to fund political parties might “ultimately overwhelm and even throttle democracy in this country”.
- Calcutta High Court was of the view that the individual citizens, although in name equal, will be gravely handicapped in their voice because the length of their contribution cannot ever hope to equal the length of the contribution of the big companies.
Leave a Comment