Ties strained as India cuts fuel subsidy to Bhutan

July 6, 2013

India_cuts

New Delhi, Jul 6: Is this a case of diplomatic overkill or just the slow grind of the bureaucratic machinery? Five days ago, India withdrew all subsidy on cooking gas and kerosene being provided to Bhutan - arguably India's only unquestioned friend among its neighbours - creating a huge crisis in the tiny, landlocked kingdom and bringing the bilateral ties under strain.

Gas and kerosene prices have more than doubled in Bhutan, and predictably, this will hit the poor the hardest. The head of the interim government, Sonam Tobgye, has written to external affairs minister Salman Khurshid, seeking his intervention. Government sources here confirmed that Bhutan embassy had sought an appointment with Khurshid, who landed in Delhi only on Friday afternoon after his trip to Brunei and Singapore, to deliver the letter.

The subsidy cut has come against the backdrop of New Delhi smarting since last year when Bhutan PM Jigme Thinley appeared to be cosying up to Beijing. He had a meeting with the Chinese premier in Rio and also imported some 20 buses from China. India, which has historically supported Bhutan's foreign policy, including its membership to the UN, was taken by surprise.

The Thinley government has since played down his meeting with the Chinese leader, but not everyone in New Delhi seems convinced about its purported innocence. In fact, the mandarins here view it as a shift in Thimpu's foreign policy - a shift that appears to have been done at the instance of the elected Thinley government. However, it couldn't be ascertained whether the subsidy cut was linked to this.

Sources in Indian Oil Corporation told TOI that it stopped supplying subsidized gas and kerosene to Bhutan after it received a communication from the Indian government saying that henceforth it will not reimburse the subsidy component of fuels supplied there.

The subsidy cut has come bang in the middle of Bhutan's second election, scheduled for July 13. How big the impact of this is can be measured by the fact that the incumbent Druk Phuensum Tshogpa (DPT) party president and the last prime minister, Jigme Thinley, has cut short his campaign and returned to Thimpu. His pitch is that helping out the poor was more important than electoral campaigning.

Is the subsidy cut a considered step or some bureaucrat's ill-advised enthusiasm? Officials here are suggesting that since the Bhutan 10th Plan expired on June 30, the fresh terms of financial assistance, including subsidies, would have to be negotiated with the new government.

As it happens, apart from the China angle, New Delhi has also been miffed at the cost escalation of power projects in Bhutan which it is financing. In some cases, the cost has almost doubled, raising suspicions of some fund diversion.

India's reservations about Bhutan's policies under Thinley is said to be a key reason why New Delhi reacted very late to bail out the kingdom from its rupee liquidity crunch. It extended a standby credit facility of Rs 1,000 crore for Bhutan only in January this year during the visit of Bhutan king Jigme Wangchuck with whom New Delhi continues to enjoy excellent relations.

So, was the subsidy cut an effort to convey a message to Thimpu, more specifically to the Thinley dispensation? If so, the medium for the message could have been better chosen. The one-go subsidy cut isn't an ordinary step: it has affected over half the Bhutan population badly. What's more, it has enabled Jigme Thinley to brandish his patriotic credentials and could end up helping him in the elections.

As is well known, India isn't exactly loved by its neighbours for its alleged big-brotherly attitude. The exception has been Bhutan, which is sandwiched between two giants, India and China. While the tall Himalayas lie between Bhutan and China, it has an open border with India, as well as free trade, access of markets and cultural affinity.

While the Thinley regime might have introduced a thorn in the warm ties, the one-shot cut in subsidy may not help in bringing back the warmth. On the contrary, it might end up fanning an anti-India sentiment among the people there. So, while New Delhi's concerns seem justified, greater thought is required to handle the emerging problem.

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News Network
April 2,2020

New Delhi, Apr 2: With 437 new cases reported in the last 24 hours, the tally of COVID-19 positive cases in India shot up to 1,834 on Wednesday night.

The number of deaths in the country due to COVID-19 has risen to 41.

The total number of active cases in the country is 1,649. 143 persons have been cured and discharged from the hospitals. One person has migrated, according to the data provided by the Ministry of Health and Family Welfare.

Earlier on Wednesday, Union Home Secretary Ajay Bhalla urged all state governments and Union Territory administrations to ensure the lockdown measures issued by the Ministry of Home Affairs are strictly implemented.

"All the state governments/UT administrations are requested to strictly implement the lockdown measures issued by MHA in the exercise of the powers under Disaster Management Act, 2005 in letter and spirit," Bhalla said.

Prime Minister Modi had earlier announced a 21-day lockdown in the entire country to deal with the spread of coronavirus, saying that "social distancing" is the only option to deal with the disease, which spreads rapidly.

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Agencies
July 30,2020

New Delhi, Jul 30: India witnessed a single-day spike of 52,123 COVID-19 cases as the total cases in the country reached 15,83,792, the Union Ministry of Health and Family Welfare said on Thursday.

The total cases include 5,28,242 active cases and 10,20,582 cured/discharged cases, the Health Ministry added.

A total of 775 deaths were reported in the last 24 hours taking the death toll to 34,968.

Maharashtra continues to be the worst-affected state as it reported 9,211 new COVID-19 cases 298 deaths on Wednesday. The total number of cases is now at 4,00,651 including 2,39,755 recovered cases, 1,46,129 active cases and 14,463 deaths.

The total number of cases in Tamil Nadu reached 2,34,114.

Delhi reported 1,035 COVID-19 cases yesterday, taking the total number of cases in the national capital to 1,32,275.

The total number of COVID-19 samples tested up to July 29 is 1,81,90,382 including 4,46,642 samples tested yesterday, said the Indian Council of Medical Research (ICMR).

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News Network
January 1,2020

New Delhi, Jan 1: In the backdrop of huge losses borne by airlines, Aviation Minister Hardeep Singh Puri has said the government is concerned that more airlines will shut down if predatory pricing continues. "Some predatory pricing is taking place" in airfares, the minister told reporters on Tuesday. Mr Puri however ruled out any plan by the government to regulate airfares. The remarks come amid high competition in the country's aviation sector, struggling against high fuel prices and other operating costs.

"The interesting thing that we have observed is that on Delhi-Mumbai route 20 years ago, the average fare was Rs 5,100. Today, the average fare is Rs 4,600. Some predatory pricing is taking place. It means people are selling tickets below their cost," he said.

"One of our concerns is that if there is predatory pricing, then the airlines will stop functioning. This is not Air India's problem only. Jet Airways got shut down. Before that, it was Kingfisher airline," he said.

IndiGo and SpiceJet - two of the country's biggest airlines - reported losses of Rs 1,062 crore and Rs 463 crore respectively in the second quarter of 2019-20. Other airlines have also reported losses in the quarter that ended on September 30, 2019.

Asked if predatory pricing is the reason for the ill health of the airlines, the minister said, "No, there are many reasons... Predatory pricing is one of the factors. But the profitability of an airline is dependent on (a) number of things."

Asked if the trend of predatory pricing has come down after regular discussion with the airlines, he said, "Yes, absolutely."

"It is (a) constant battle. An ideal situation from an airline's point of view is that they grow and they are also able to charge more fares. What fares they charge is their business. Our advice to them is to charge realistic fares," he added. "It should not be too high. And it is not in your business interests if you are imposing predatory fares."

The minister also said that the government is not planning to regulate fares. "No regulation. It has to be done within deregulation system.... If I put a cap on fare, the airline will start charging that cap only... that cap will become the normal fare... So, within a deregulated structure, we have to bring about an equilibrium," the minister said.

"Government, periodically, at my level or at secretary''s level, we sit down with the main aircraft operators and tell them it is in your interest not to allow such practices which undermine the civil aviation sector."

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