Tuesday, June 12, 2012

Dieselification of the economy and its Long term impact

With diesel heavily subsidized by the government, the impact is clearly visible -People are figuring out a way to replace other fuel with diesel, wherever possible. It is for everyone to see that the sale of diesel cars is growing much more than that of petrol.

It is so short term and so foolish! Two things - First, government cannot continue to subsidize it for ever, that is clear. 2nd, diesel (as a fossil fuel) is going to ultimately run out, that too is clear.

By subsidizing diesel, government is doing two things - a) Burning a hole in its pocket, running a fiscal deficit that is scaring the investors away and hence slowing down the economy. b) Channeling money, R&D, effort, time and energy of other enterprises (government owned or otherwise) in an area which anyways is not a long term bet.

We as a nation would be much better off if  we put in these kind of resource in researching alternate form of energy, something that is going to last long term - fusion reactors, bio fuel, efficient solar panels, safer fission reactors, efficient wind turbines, harnessing wave energy, tapping geothermal energy. So much can be done, only if we set our goals right.


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