While deisel and LPG are subsidised, CNG is not. So lets leave CNG out of this debate.
What the government is doing is making money on petrol and providing subsidy on Deisel and LPG. However, the problem is that a significant portion of this subsidy is not going where it is intended to go i.e. Busses and Trucks. it is going on deisel cars/MUV/SUVs. Given this policy of the Govt. to keep increasing the price of Petrol, they are in fact supporting this. What will happen eventually is that the petrol consumption will come down significantly and deisel consumption will shoot up. The model of subsidising deisel and LPG from petrol, will not work then. It is pretty simple maths, but somehow, this government is lacking some basic common sense.
Same thing it is doing with the economy in general. In order to tame inflation it is increasing the interest rates. However, that is not checking inflation at all. On the other hand it is curbing the economic growth. Ultimately, it may lead to a fresh recession.
Wonder, what is happening with our government?
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