Vivek Kaul’s Diary

Mr Jaitley, India can’t Shoulder Global Growth as China Slows Down

Fostering Public Leadership - World Economic Forum - India Economic Summit 2010
Being rhetorical is a part and parcel of being a politician. Or you run the risk of being called Maun Mohan Singh. Nobody perhaps understands this any better than the finance minister Arun Jaitley, who is more or less the official spokesperson for the Narendra Modi government.

Jaitley recently said in London that India can shoulder some of the global growth contribution previously made by China. As The Hindu Business Line reports: “India can shoulder some of the global growth contribution previously made by the Chinese economy, Finance Minister Arun Jaitley said in London, ahead of his trip to Davos. The world was now looking for additional “shoulders to rest global growth on,” and India would be part of it he said, acknowledging the “serious challenges” faced by the global economy.”

“India’s growth rate, despite challenges is, among the major economies, the highest in the world,” Jaitley added.

The comment came after the Chinese economic growth fell to a 25-year low of 6.9% in 2015. In fact, the Chinese economic growth for the period October to December 2015 was at 6.8%. In 2014, the economic growth had stood at 7.3%. The Chinese economic growth has collapsed from the peak of 14.2% it had reached in 2007.

This slow Chinese growth led Jaitley to quip that India can shoulder some of the global growth contribution previously made by China. But how much sense does this statement make? Or was it just rhetoric on Jaitley’s part, as is often the case?

Let’s try and use some numbers here to understand.

Data from the World Bank shows that in 2014, the Chinese gross domestic product (GDP at market prices (constant 2005 US$)) was at $ 5.27 trillion. An economic growth of 6.9% in 2015 means that China added around $364 billion to its GDP and the world GDP as well.

India is now the fastest growing major economy in the world. During the period July to September 2015, the economic growth stood at 7.4%. Let’s assume that the country grows at this rate in 2015, given that the economic growth number for 2015 for India hasn’t come out as yet.

In 2014, the Indian GDP (at market prices (constant 2005 US$)) was at $1.6 trillion. The Chinese GDP was at $1.54 trillion in 2001, close to where the Indian GDP is now. The country has grown at a rate of 9.9% per year between 2001 and 2014. This tells us very clearly as to how fast India needs to grow if it has to reach where China is now.

Getting back to India. The Indian GDP in 2014 was $1.6 trillion. If India grew by 7.4% in 2015, it would mean adding $118 billion to its GDP, which is around one-third of what China has added, growing at a slightly slower rate of economic growth.

The basic point being that given that the Chinese economy is so much bigger than the Indian economy, even if it grows at a slightly slower rate than India’s, will contribute significantly more to the global economy. Or to put it a little more mathematically, China is growing of a much bigger base.

If India had to contribute as much as China (i.e. $364 billion) to the global economy it would have to grow by 22.7%. If India had to contribute even half as much as China it would have to grow at 11.4%. In times like these that is not possible. And that tells us why India can’t shoulder even a part of the global growth because of China slowing down. Also, as China slows down, India will slow down as well to some extent. We can’t be totally disconnected from a slowing global economy.

Hence, what these numbers clearly tell us is that Jaitley was doing what he does best—being rhetorical. That isn’t surprising given that before becoming a full-time politician he was a full-time lawyer.

The irony is that the Indian economic growth number suddenly started to look up after we moved to a new method to calculate the GDP in early 2015. As I keep mentioning GDP is a theoretical construct. The various ‘real’ economic numbers make it very difficult to believe that the economic growth is possibly greater than 7%.

In fact, as Bank of America-Merrill Lynch has pointed out, the economic growth during the period July to September 2015, as per the old method of calculating the GDP would have been 5.2% and not 7.4% as it has been as per the new method. Even for the period April to June 2015, the economy grew by 5% as per the old method, instead around 7% as per the new method.

This is not to say that the Chinese economic data is sacrosanct. As economist Eswar Prasad told the Wall Street Journal reacting to China’s 6.9% economic growth in 2015: “China’s reported growth rate for 2015 raises many questions rather than providing full reassurance about the economy’s true growth momentum.”

In fact, hedge fund manager Martin Taylor of Nevsky Capital summarised the situation very well when he said: “Currently stated Chinese real GDP growth is 7.1% and India’s is 7.4%. Both are substantially over stated. This obfuscation and distortion of data, whether deliberate or inadvertent, makes it increasingly difficult to forecast macro and hence micro as well, for an ever growing share of our investment universe.” Taylor’s comment was made before the latest

Chinese economic growth number came out and summarises the situation best.

The column originally appeared in Vivek Kaul’s diary on January 25, 2016

Is Your Banker with You or with Corporates?

RBI-Logo_8What is the purpose of a bank? Any bank?

It is to match lenders with borrowers.

It is to take the savings of people (i.e. deposits) by offering a certain rate of interest and then lend it out at a higher rate of interest, and in the process make a reasonable profit.

Is that all there is to it? No.

The bank also has to ensure that the deposits that it lends out are fully repaid. This means carrying out a proper “due diligence” of the borrower, before lending money.
It also means lending only to those people it expects will repay.

It also means not lending to people and companies who are already in trouble.

It ‘basically’ means not putting the depositor’s savings at risk.

These are the basic tenets of banking, which the Indian banks, in particular banks owned and run by the government, have broken over the past few years, and continue to do so.

Take the case of the 5/25 scheme which banks have been using in order to restructure loans which borrowers have had trouble repaying. What is the 5/25 scheme? There are many physical infrastructure projects which have long gestation periods of up to 25 years. The trouble is that companies which have borrowed money to build such projects need to repay the principal amount of the loan in a period of around five years.

And this creates a problem simply because in a short period of five years, physical infrastructure projects like roads do not start to throw up money which can be used to repay the loan that has been taken on.

In this scenario defaults start to happen even though the project continues to remain economically viable. It’s just that a period of five years is too short a time for the project to start throwing up money which the corporate can use to repay the loan that it has taken on. Having said that, such a loan could perhaps be easily repaid over a period of 25 years.

The Reserve Bank of India has allowed banks to restructure such loans by allowing corporates to delay making principal repayments of the loan. In some cases, interest repayments have also been delayed.

As Suresh Ganapathy and Sameer Bhise of Macquarie Research write in a recent research note titled Apocalypse Now: “RBI has allowed that going forward, banks can restructure loans such that they can finance the projects for 5 years and at the time of structuring the contract, stipulate an explicit condition that at the end of 5 years, loans will be rolled forward for the next 20 years and define milestone payments at the end of every subsequent 5-year period.”

A loan restructured under the 5/25 scheme is not treated as a bad loan. Further, only loans of Rs 500 crore or more can be restructured under this scheme.

All this sounds good on paper. The trouble is this rule is being used by banks to postpone the recognition of bad loans. Take the case of Essar Steel. As Ganapathy and Bhise write: “For example, in case of Essar Steel—an account that HDFC Bank already classifies as a non performing loan and on which the bank has already taken 40% provision—other banks have instead refinanced their loan. According to the terms agreed by the consortium of bankers led by State Bank of India, Essar Steel needs to pay just about 9% of the principal loan in the initial 7 years, and the remaining 91% will be due for refinancing at end-2022.”

What does this tell us? HDFC Bank probably the best managed bank in the country has classified Essar Steel as a bad loan. Other banks led by State Bank of India have refinanced the loan. Refinancing essentially means giving a new loan so that the older loan can be repaid, and a new loan can be started on better terms for the borrower.

The question is why are banks refinancing a loan to a company in the steel sector, which is currently in a mess and is unlikely to recover any time soon. The prospects of the sector remain largely subdued over the next five years.

Also, what explains HDFC Bank categorising the loan as a bad loan, and other banks giving Essar Steel a fresh loan? It is not surprising that HDFC Bank as on March 31, 2015, had a net non-performing assets ratio (one representation of bad loans) of 0.20% of its total advances. In case of State Bank of India the number had stood at 2.12%. This is a clear case of what the RBI governor Raghuram Rajan had called “extend and pretend” that all is well.

Now let’s take the case of Bhushan Steel. Loans of the company amounting to Rs 40,000 crore were restructured under the 5:25 scheme in February 2015. As Parag Jariwala and Vikesh Mehta of Religaire Institutional Research write in a research note titled SDR: A band-aid for a bullet wound: “Under 5:25, Bhushan Steel’s loan repayments have been postponed for the first four years and thereafter are to be made in a staggered manner in the next 21 years. Management stated that the company may face small repayments of Rs 500 crore per annum which in all probability will be funded by the current set of banks.”

Between 2015 and 2019, Bhushan Steel need not make principal repayments on the loans worth Rs 40,000 crore. Over and above this, it is not in a position to repay even the small repayments of around Rs 500 crore per year. The banks will give it new loans so that it can pay these dues. Jariwala and Mehta point out that the company can generate only up to Rs 200 crore of free cash flow during the course of this financial year. Hence, it is not in a position to repay Rs 500 crore. The company also has interest dues of close to Rs 4,000 crore during the course of this year.

The question is if a company is not in a position to repay Rs 500 crore currently, will it really get around to being able to repay Rs 40,000 crore over a period of time?

In fact, the loans given to many big business groups are being restructured under the 5:25 scheme. As Ganpathy and Bhise point out: “As the table below shows, several cases are now being considered for 5:25 refinancing, which also explains why some of these large groups are not currently classified as non-performing loans. Close to 1.7% of system loans are under consideration or already being implemented for 5:25 refinancing. Another issue is that banks may have lent fresh loans to these groups to cover interest payments on older loans.”

What does this mean? It means that the banks will be able to further delay recognising bad loans as bad loans for the next few years. As Zariwala and Mehta write: “Banks are likely to restructure such accounts through SDR/5:25, which would delay non-performing assets recognition as well as increase the likely losses due to additional funding.”
To conclude, it is safe to say that the banks are clearly with companies and not with depositors whose hard-earned money they have lent.

The column originally appeared on Vivek Kaul’s Diary on January 22, 2016

 

When It Comes to Bad Loans of Banks, Nothing is as It Seems

rupee
One of the issues that I have been regularly writing about is the bad state of banks in India. The tragedy is that their state continues to get worse as time progresses.

As on September 30, 2015, the bad loans of the banking system amounted to 5.1% of the total loans given by banks. The number was at 4.6% as on March 31, 2015. This is a huge jump of 50 basis points in a short period of just six months. One basis point is one hundredth of a percentage.

The trouble is that even the bad loans number of 5.1% of total loans, may not be the right number. This is primarily because over the years the Indian banks, in particular public sector banks, seem to have mastered the art of not recognising a bad loan as a bad loan. They have turned the practice of kicking the can down the road, to an art form.

Banks have used various methods to delay the recognition of bad loans and this has made balance sheets of banks more opaque. As Suresh Ganapathy and Sameer Bhise of Macquarie Research write in a recent research note titled Apocalypse Now: “The biggest problem that we now have with the Indian banking industry is that various regulatory forbearance techniques like restructuring (for under-construction infra and long term projects), 5:25 refinancing, SDR (strategic debt restructuring), NPL sales to ARCs (asset reconstruction companies) etc., are making the balance sheets of banks more opaque.”

Forbearance essentially means “holding back”. In the context of banking it means that the bank gives more time/better terms to the borrower to repay the loan, among other things. This could mean extending the term of the loan, lowering the interest or even postponing the repayment of the principal of the loan for a few years. Such loans are also referred to as restructured loans.

These options were supposed to be used sparingly. Nevertheless, banks in general and public sector banks in particular have massively abused these options over the years, in order to postpone the recognition of bad loans.

The bad loans of public sector banks stand at 6.2% of total loans, as on September 30, 2015. The restructured loans on the other hand stand at 7.9% of total loans. For the system as a whole, the number stands at 6%, which is higher than total bad loans, which stand at 5.1% of total loans.

The trouble is that many of the loans which were restructured in the years gone by have been defaulted on. As mentioned earlier one of the popular methods of restructuring a loan is to give the borrower a moratorium of few years on the repayment of the principal amount of the loan. The idea is that in that period the company will manage to set its business right and be in a position to start repaying the loan.

But that hasn’t happened. The restructured loans have been turning into bad loans. Ganpathy and Bhise of Macquarie Research estimate that the failure rate of restructured loans has jumped from 24% to 41%, over the last two years. “Many of these loans have come out of their principal moratorium and started defaulting,” the analysts point out.

What such a large default rate clearly tells us is that many of these loans should not have been restructured in the first place. As a November 2014 editorial in the Mint newspaper points out: “The decision to restructure a loan was supposed to be a technical one, taking into account the viability of the borrower. But in case of government banks, the decision to restructure has often been influenced by political considerations, and has depended on the clout of the concerned promoters.” The restructured loans now being defaulted on would have been restructured before the Narendra Modi government came to power in May 2014.

The situation is likely to get worse given that around half of the restructured loans were restructured over the last two years. Hence, companies have a moratorium on principal repayments for a period of two years. Once they start coming out of this moratorium, the loan defaults will go up.

Over and above this many companies continue to remain highly leveraged, that is they have significantly more debt on their books in comparison to their equity. In fact, as the Financial Stability Report released by the Reserve Bank of India(RBI) in December 2015 points out: “The proportion of companies among the leveraged companies with debt equity ratio of >=3 (termed as ‘highly leveraged’ companies) increased from 13.6 per cent in September 2014 to 15.3 per cent in September 2015, while the share of debt of these companies in the total debt increased from 22.9 to 24.9 per cent.”

This has happened because banks have lent more money to companies which are already in trouble and not in a position to repay their loans. As Parag Jariwala and Vikesh Mehta of Religaire Institutional Research write in a research note titled SDR: A band-aid for a bullet wound: “Bank funding to stressed corporates has gone up in the last 2-3 years and most of it is towards funding additional working capital requirement, loss funding and interest accruals (not paid). This will translate into large and bulky credit cost for banks if these accounts slip into non-performing assets [bad loans].”

Also, there is the problem of large borrowers. As Jariwala and Mehta point out: “The RBI’s analysis shows that stressed assets [bad loans + restructured assets] as a proportion of total loans to large corporates have gone up from 13.8% in Mar’15 to 15.5% in Sep’15.”

Further, what is worrying is that banks are still to recognise many of these loans as bad loans. As Ganpathy and Bhise point out: “The issue is that some of these large corporate groups have already been downgraded to default by rating agencies. Since banks have a 90-day window to classify as non-performing loans plus have other regulatory forbearance techniques like restructuring (still can be done for underconstruction projects) and 5:25 refinancing, these assets are not being shown as non-performing loans on the books.”

The analysts estimate that large borrowers form around 11-12% of total bank loans and roughly 15% of these loans are likely to turn into bad loans over the years.

Once these factors are taken into account, Ganpathy and Bhise feel that “potentially 16-18% of the loans will attract higher provisions and/or see write-offs over the next 3-4 years.” This means nearly one-sixth of bank loans can still go bad. And that is a huge number.

Hence, when it comes to bank loans, nothing is as it seems.

Stay tuned!

The column originally appeared in the Vivek Kaul Diary on January 21, 2016

Some New Lessons on Jobs from an Old Economist

hyman minsky
Many economists do not write in a language which is easily understandable. While John Maynard Keynes was a terrific writer (he is possibly the only economist who actually came up with one-liners), his magnum opus The General Theory of Money, Interest and Employment, which was published in 1936, isn’t such an easy read.

Believe you me! I have tried reading it several times over the years.

Just because the book isn’t an uneasy read, doesn’t mean that the points it is trying to make are not important. As Paul Samuelson, the first American economist to win a Nobel Prize, wrote about Keynes’ book, in a research paper titled Lord Keynes and the General Theory. As he wrote: “It is a badly written book, poorly organized; any layman who, beguiled by the author’s previous reputation, bought the book was cheated of his five shillings…It is arrogant, bad tempered, polemical and not overly generous in its acknowledgements. It abounds in mares’ nests and confusions…In short, it is a work of genius.”

Another economist whose work is not easy to read is the American economist Hyman Minsky, who died in 1996. The world discovered Minsky and his work in the aftermath of the financial crisis that started in September 2008 and so did I.

I tried reading Minsky’s magnum opus Stabilizing an Unstable Economy but could only read it half way through. I have been lucky to have since discovered other authors and economists who have tried to explain Minsky’s work in a language that I have been able to understand.

Over the last few days I have been reading L Randall Wray’s Why Minsky Matters—An Introduction to the Work of a Maverick Economist. Other than discussing Minsky’s views on banking and the financial system in great detail, Wray also discusses what Minsky thought of unemployment. Minsky’s interest in unemployment primarily came from the fact that he was brought up during The Great Depression, when the United States saw never before seen levels of unemployment and a huge contraction of the economy.

And what did Minsky think of the unemployment problem? As Wray writes: “His argument [i.e. Minsky’s] was that simply increasing the “employability” of the poor by providing training without increasing the supply of jobs would just redistribute unemployment and poverty. For every better trained worker who got a job, a worker with less training would become unemployed. Minsky was not arguing against better education and training—he was arguing that to reduce unemployment and poverty we need more jobs, too.”

Minsky also argued against the idea that “if the economy grows at a sufficiently robust pace, the jobs will automatically appear.” As Wray writes: “The notion that economic growth together with supply-side policies to upgrade workers and provide proper work incentives would be enough to eliminate poverty was recognized by Minsky at the time to be fallacious. Indeed, evidence suggests that economic growth mildly favours the “haves” over the “have-nots”—increasing inequality—and that jobs do not simply trickle down.”
How do things stack up in the Indian context? First and foremost, let’s look at the youth literacy number and how it has changed over the years. As per the Human Development Report, in 1990, the youth literacy rate (i.e. individuals in the age 15 and 24) was at 64.3% in 1990. This improved to 76.4% in 2003. In 2013, the youth literacy rate for men was at 88.4% and for women at 74.4%.

What these data points tell us clearly is that the education level of India’s youth has improved over the years. But has this led to more jobs? Answering this question is a little tricky given how bad Indian data on jobs is.

Nevertheless, as the Economic Survey released in February 2015 points out: “Regardless of which data source is used, it seems clear that employment growth is lagging behind growth in the labour force. For example, according to the Census, between 2001 and 2011, labour force growth was 2.23 percent (male and female combined). This is lower than most estimates of employment growth in this decade of closer to 1.4 percent.”

Hence, even though the youth education has improved over the years, this hasn’t led to an adequate number of jobs. This is clearly visible in all the engineers and MBAs that we produce without having the right jobs for them.

As Akhilesh Tilotia writes in The Making of India: “An analysis of the demand-supply scenario in the higher education industry shows significant capacity addition over the last few years: 2.4 million higher education seats in 2012 from 1.1 million in 2008.” In 2016, India will produce 1.5 million engineers. This is more than the United States (0.1 million) and China (1.1 million) put together.
The number of MBAs between 2012 and 2008 has also jumped to 4 lakh from the earlier 1 lakh. As Tilotia writes: “India faces a unique situation where some institutes (IITs,IIMs, etc.) are intensely contested while a large number of the recently-opened institutes struggle to fill seats…With most of the 3 million people wanting to pursue higher education now having an opportunity to do so, the big question that should…be asked…are all these trained personnel required? Our analysis seems to suggest that India may be over-educating its people relative to the current and at least the medium-term forecast requirement of the economy.”

This explains why many engineers and MBAs cannot find the right kind of jobs and have to settle for other jobs.

A major reason for the lack of enough jobs is the fact that Indian firms start small and continue to remain small. As Economist Pranab Bardhan writes in Globalisation, Democracy and Corruption: “Take the highly labour-intensive garments industry, for example. A combined dataset [of both the formal and informal sectors] shows that about 92 per cent of garment firms in India have fewer than eight employees.”

It’s only when small firms start to become bigger, will jobs be created. As the Economic Survey points out: “A major impediment to the pace of quality employment generation in India is the small share of manufacturing in total employment…This is significant given that the National Manufacturing Policy 2011 has set a target of creating 100 million jobs by 2022. Promoting growth of micro, small, and medium enterprises (MSME) is critical from the perspective of job creation which has been recognized as a prime mover of the development agenda in India.”

And this, as I keep saying, is easier said than done.

The column originally appeared on the Vivek Kaul Diary on January 20, 2016

 

Oil is Now Half the Price of Bottled Water in India, but Only for Govt

 

bisleri
In my Diary dated January 15, 2016, I had said that I expect the government to increase the excise duty on petrol and diesel soon. On that very evening, the central bureau of excise and customs, which comes under the ministry of finance led by Arun Jaitley, increased the excise duty on both petrol as well as diesel. This after the price of the Indian basket of crude oil had fallen to $26.43 per barrel on January 14, 2016.

This is the eight increase in excise duty on customs and excise since November 2014. The first increase had happened on November 12, 2014. With the latest increase the excise duty on petrol stands at Rs 8.48 per litre. Between November 2014 and now, the excise duty on unbranded petrol has gone up by Rs 7.28 per litre or a whopping 607%.

With the latest increase the excise duty on unbranded diesel stands at Rs 9.83 per litre. Between November 2014 and now, the excise duty on unbranded diesel has gone up by Rs 8.37 per litre or a whopping 573%.

The government has clearly captured in a large chunk of the gain because of lower oil prices. As on January 16, 2016, the price of petrol in Mumbai stood at Rs 66.09 per litre. In November 2014, when the excise duty was raised for the first time, the price of petrol in Mumbai had stood at Rs 71.91 per litre. Hence, for the end consumer, the price of petrol in the city has fallen by 8.1%.

As on January 16, 2016, the price of diesel in Mumbai stood at Rs 51.25 per litre. In November 2014, the price of diesel in Mumbai was at Rs 61.04 per litre. Hence, for the end consumer, the price of diesel in the city has fallen by 16%.

How much has oil fallen by during the same period? As on November 11, 2014 (a day before the excise duty on petrol and diesel was raised by the Narendra Modi government for the first time), the price of the Indian basket of crude oil was at $79.11 per barrel. By January 14, the price had fallen to $26.43 per barrel or close to 67%.

In rupee terms the price of oil has fallen by close to 64%. But the price of petrol and diesel has fallen by only 8.1% and 16%. In fact, if we look at the price of oil in rupee terms, we can come to a very interesting conclusion.

As on January 14, 2016, the price of the Indian basket of crude oil was at Rs 1,773.19 per barrel. One oil barrel is basically 159 litres. This means that one litre of the Indian basket of crude oil costs around Rs 11.2 per litre. One litre of bottled water (or what we call Bisleri at the generic level) typically costs Rs 20 per litre. Given this, bottled water in India is now nearly twice as expensive as oil. Or to put it in another way, oil is now half the price of that of bottled water, but only for the government. You and me have missed out on this party.

Of course, these gains haven’t been passed on to the end consumer and have been captured by the government. Interestingly, petrol prices since February 2015, have actually gone up. The price of petrol in Mumbai as on February 4, 2015, was at Rs 63.9 per litre, whereas currently it is at Rs 66.09 per litre. The price of the Indian basket of crude oil was at $54.97 per barrel on February 4, 2015. It has since then fallen by more than 50% to $26.43 per barrel.

One of the points that typically gets made in favour of the government increasing excise duty on petrol and diesel is that these fuels pollute and need to be taxed in order to protect the environment.

Data from Centre for Monitoring Indian Economy(CMIE) points out that between January and December 2014 a total of 18,385 thousand tonnes of petrol was consumed in the country. Between January and December 2015, a total of 21,089 thousand tonnes of petrol was consumed within the country. This was around 14.7% more.

A major portion of this would have come from an increase in new vehicles which run on petrol. If one takes this into account, then the consumption of petrol during the last one year, has not gone up significantly, and this despite lower prices.

How do things stand with diesel? Between January and December 2014, the total amount of diesel consumed in the country stood at 69,022 thousand tonnes. Between January and December 2015, the total amount of diesel consumed in the country stood at 72,652 thousand tonnes or 5.3% more than the previous year.

Again, if we adjust for newer diesel vehicles and other ways in which diesel is used, the total amount of diesel consumed in the country didn’t go up significantly, despite lower prices. What this tells us is that the increase in consumption of petrol and diesel has happened because of new vehicles and not because of lower prices.

So does this mean that the government will now clamp down on the production of new vehicles or increase taxes on them to make them more expensive for people to buy them and in the process control pollution?

Also, if the government was serious about pollution, why has the price differential between petrol and diesel gone up in the last 15 months? In November 2014, the difference between the price of petrol and diesel was at Rs 10.87 per litre. Now the difference stands at Rs 14.84 per litre. This raises the question that why is the government incentivising diesel, which pollutes more?

Further, the bigger question that no one in government seems to be ready to answer is what happens when oil prices start to go up again? Given that the government hasn’t passed on the bulk of the fall in price of oil to the end consumer, it is only fair that it does not pass on an increase in prices as well, as and when it happens.

In that scenario where will the government get the money for to continue to finance its expenditure? This is something that Arun Jaitley, who I call the excise duty hike minister these days, needs to answer. Or will the government increase the price of petrol and diesel, something the Bhartiya Janata Party (BJP) had majorly protested against when it was in the opposition.
Postscript: In order to understand why the government is increasing the excise duty on petrol and diesel, read this: Happy new year folks: The govt has increased excise duty on petrol and diesel again!

The column originally appeared on the Vivek Kaul Diary on January 19, 2016