A man is forced to pay Rs 110 by a government agency for an item available in the free market for Rs 35. But, to prove it is generous, the government steps in and promises to bear 45 percent of the inflated cost. It asks the buyer to pay just Rs 60 and promises to pay the remaining Rs 50 directly to the seller.
So, here is a question: Did the government subsidise the buyer's cost or overcharge him? Was this generosity or profiteering because of monopoly? My bet is, even a primary student would work out the math and come up with the right answer.
Withdrawal of Haj "subsidy" might be good politics for the BJP. But, it is certainly bad economics for Air India, the official carrier with a monopoly over the Haj traffic.
By withdrawing the so-called subsidy, essentially an act of financial jugglery based on the principle of picking a pocket to donate half of it back to the victim, the government has deprived the state carrier of a guaranteed source of revenue—and perhaps even profit—during the Haj season.
Before we get into a debate on Haj vs Kumbh Mela subsidy, let us consider the economics of Haj. Suppose a pilgrim was going to Medina from Srinagar. If he had the liberty to choose the airline, the return fare, especially if booked in advance, would have been just around Rs 35,000. A return ticket to Delhi would have cost around Rs 8,000. And from there to Jeddah and back would have been around Rs 28,000. (Air Saudia, Delhi-Jeddah, March 15 onward and March 20 return, listed fare on 17 January 2018).
How did this math work out during the 'subsidy' system? Under the subsidy Raj, the same pilgrim would have been charged nearly Rs 1.10 lakh, as this Times of India report points out, for flying from to Jeddah from Srinagar, which was the only embarkation point for pilgrims in the Valley. Out of this Rs 1.10 lakh, the pilgrim would pay 55 percent, around Rs 60,000. The remaining 45 percent was 'reimbursed' to Air India by the government in the name of Haj subsidy.
Simple math suggests, even without the subsidy, Hajis were being overcharged. The entire subsidy claim was mere eyewash. Essentially, the government has withdrawn, as Gulf News argues, a dole that didn't exist.
Air India, of course, has an explanation for overpricing tickets during the Haj season. It argues that prices are higher because their crafts have to return empty due to restrictions by the Saudi government. But, even an empty craft doesn't justify a nearly 175 percent increase in fare. (Rs 35,000 to Rs 1,10,000).
So, let us get it straight. Inflated prices had kept the government keep up the facade of a Haj subsidy. The entire exercise was just about round-tripping of money from one government agency to another. Since there is unlikely to be any actual saving, only the government can explain how it intends to spend the money diverted from the Haj subsidy on welfare schemes?
All these nuances, however, do not bother the BJP. At the moment, it is busy playing the fascinating game of playing to the Hindutva galleries and selling its craft as minority welfare. Carrying out the Supreme Court-mandated reforms like banning triple talaq and phasing out the Haj 'subsidy' is a win-win situation for the party. While the decisions coddle its core constituency, they get applauded by the liberals among Muslims too.
Yet, it can't evade charges of a sectarian bias in its policies. If abolishing Haj "subsidy" is right, on what basis can governments continue to spend on various Hindu festivals, melas and yatras? Perhaps the government feels by spending on Kumbh Melas and Mansarovar Yatras, Hindus can achieve exactly what Muslims are denied through Haj -- empowerment.
Or, as poet Iqbal lamented in his famous shikwa: Barq girti hai bechare Mussalmanon par (lightning strikes only the poor Muslims)?
Updated Date: Jan 17, 2018 18:33 PM