Economics-A Piece of cake not affordable to everyone

chidiyaMost of us have seen this pic floating in some way or the other on social media.If you also agree that Modi has failed in controlling the prices then we are sorry to say that you have no idea about economics.


In layman’s terms, Government of India is storing oil for hard times when the rates shoot up exorbitantly due to world crisis or supply disruptions.

It was first approved by NDA 1 under ji govt to build strategic reserves, STALLED by Congress for 10 years with no work done. NDA2 under Modi has started where Vajpayeeji left. Govt. is spending to the tune of 8 billion dollars in building India’s maiden strategic reserves.

Where is this money coming from ????These storage of oil are termed as ‘STRATEGIC OIL RESERVES‘. (GOOGLE IT FOR GOD’S SAKE)To provide a bit of background, India had conceived of a strategic petroleum reserve as far back as in the late 1990s and after several committees and studies, the project to build a strategic storage for crude oil was given the go ahead early in 2004 by the NDA government. The plan was to build storage capacities in three places — Mangaluru and Padur (near Mangaluru) on the west coast and Visakhapatnam on the east. With a total capacity of 5 million tonnes, this storage was estimated to cover two weeks’ requirements. A special purpose vehicle — Indian Strategic Petroleum Reserves Ltd. (ISPR) — was floated under the Oil Industry Development Board to implement the project. So far, so good.

The problem started when the UPA government, which assumed office soon after, decided to review the strategic storage plan and precious time was wasted in further studies by the Planning Commission. To cut a long story short, a decade after the project was initiated, not one of the three planned storages has been completed till now. Costs have, meanwhile, escalated and the opportunity to secure the country’s energy supplies has been squandered.

Another factor is the huge increase in the labor,transportation and other costs between the years.

So comparison between both of them is nothing but a foolishness.