Former Prime Minister Dr Manmohan Singh's regime is being blamed for consumers' woes today.
A "financial fraud" played by the UPA government (2004-2014) using the instrument of oil bonds is responsible for India's consumers suffering today, government have sources. They also accused "non-politicians" of that day's administration of dereliction of duty by not stopping the politicians in this matter. The Congress, however, brushed aside the argument, calling it "lame".
Sources pointed out that under-recoveries of oil companies, thanks to oil subsidies, were converted into oil bonds by the UPA regime under Prime Minister Dr Manmohan Singh.
"These bonds were issued to finance the subsidy given on some petroleum products to cover the difference between the purchase price by the oil companies and the reduced price they were forced to sell by the UPA government," the government sources said.
"In normal circumstances, the subsidy is treated as revenue expenditure and, thus, forms a part of the budget. By issuing these bonds, the subsidy was treated as an off-budget item, and so the revenue deficit was reduced," they said.
Now, from this year, such bonds worth Rs 1,30,701 crores have been up for redemption. The interest payable on them for this year is Rs 10,000 crore, they said.
"Effectively, the managers of the economy -- the government concerned, the bureaucrats, the economic advisors, the governors of the Reserve Bank of India, etc -- were all involved..." sources said.
"They also allowed the government of the time to pass on the responsibility to the government that would follow. Hence, the non-politicians have done a very serious dereliction of their duties, and should be held to a higher level of responsibility than the politicians," they said.
The amounts involved are not small, and will adversely affect the programmes that the current government would want to do, according to them.
In the past seven years of Prime Minister Narendra Modi's government, up to Rs 70,000 crores has been spent on interest payment alone, source pointed out contrasting it with this year's budgetary allocation of Rs 35,000 crores towards the pandemic.
However, at least one Congress leader called the argument "lame".
Amitabh Dubey, President of Professionals' Congress, Delhi, pointed out that PM Modi's government had, in the past six weeks alone, increased fuel prices by Rs 7 per litre.