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Thursday, 28 January 2021

If the subsidy is not removed, then why is the demand reduced?

In the Corona era, it is the turn of the general public to be hit by inflation everywhere.  On the one hand, the prices of vegetables and petrol are skyrocketing.  On the other hand, the facilities provided to the people by the government are now being gradually cut.  For example, in April 2020, a domestic gas cylinder cost Rs 785.50, with a bank account subsidy of Rs 199.10.  But now 40 rupees is only 10 paise.  The question now is, does the government want to gradually remove the subsidy, or will it stop it altogether?

Is the government reducing gas subsidies?

 According to a media report, one of the reasons for the removal of subsidies in domestic cylinders is the growing black market.  According to the report, a family of 4 people does not need more than 6-7 subsidized cylinders in a year.  While LPG customers get 12 cylinders a year on subsidy.  At such times, some people sell the cylinder in black.  The subsidy is being withdra

wn to prevent this.

If the subsidy is not removed, then why is the demand reduced?

 Demand for domestic cylinders has declined in the last few months, a market report said.  While the demand for cylinders at marketing rates has increased.  This has bridged the gap between subsidized and non-subsidized cylinder prices.

Demand for domestic gas cylinders has fallen by 20 per cent in several cities, according to a report.  To a large extent this demand has been met by commercial cylinders.

Cylinders available at market rates are often cheaper than domestic cylinders found in black.  That is why it has been observed that the consumer prefers to buy a commercial instead of buying a cylinder in black at a higher price.

 Is the government abolishing subsidies?

 The first question is whether the government is scrapping subsidies.  The answer is that the government has not taken any such policy decision, then the question is, why the subsidy in the people's account has been reduced?  So the answer is, there is a question between the company and the consumers.

Reduced subsidies to curb black market?

 A report also states that there is no large-scale black market, which is why no such decision has been taken.

 So why did people take home cylinders less?  Are people getting commercial cylinders at low prices in the open market.  Whatever the reason, it is certain that there are a large number of people who have less subsidy money in their accounts.

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