The price per domestic LPG cylinder is expected to go up by up to `32 with the setting in of GST and a reduction in subsidies. At the same time, the price of commercial cylinders has benefited from GST as tax on them has come down from 22.5 per cent to 18 per cent. Any change in domestic LPG price would be a big blow to the lower and middle classes, particularly in urban areas where no alternative fuel is available.
The urban lower middle class is the most vulnerable to such vagaries in fuel prices than any other segment of society. Available alternatives such as electric induction cookers and microwave ovens are also often not reliable as power supply is not adequate or economical for users.
It is true that LPG prices had fallen in recent times but that is no excuse for this kind of a hike particularly in the domestic segment. What the government needs to do is to provide alternatives for people to rely on. At present, the country lacks robust systems of waste management that can turn wastes into fuel.
The immense potential that urban spaces offer as generators of huge quantities of waste must be harnessed. Along with Energy Conservation Building Code (ECBC) guidelines for the construction of energy efficient commercial buildings, the government must also consider providing guidelines for realtors to provide biogas units within apartment compounds for them to also be energy self-sufficient.
It would help the urban middle class to rely on alternative sources in emergencies. Also, solar and wind energy sources should be harnessed for domestic use. Proper infrastructure investments in these sectors have been chronically ignored by the Indian government for as long as one can remember.
While other nations in Asia have invested massively in renewable energy sources and are benefitting greatly now because of those earlier investments, India has been left far behind in both research and development.
While lifting subsidies on fuel, the government should also ensure that it directs some of its efforts towards providing energy security, too, to households. With the coming of GST, the consumer will now have to pay extra for other services provided by gas companies such as two-year mandatory inspection, installation, administrative charges for documentation for new connections and additional cylinders.
That is further strain on the consumers’ pockets. All such changes can be put down as teething troubles of the GST regime. But it simply means more pain for the consumer who is already struggling in the aftermath of demonetisation. The situation calls for quick action on the part of the government to ameliorate the ill effects of GST.
It has set the GST juggernaut rolling down the grand road of Indian economics without proper infrastructure and knowledge dispersal. Now it has to also take care that people’s interests do not get crushed under its heavy wheels.