Economic populism, partial deregulation of transport fuels and electoral outcomes in India

Sunderasan Srinivasan

Energy Policy, 2014, vol. 68, issue C, 465-475

Abstract: The Indian political class is known to employ populist, albeit economically unsustainable, measures to replace intrinsic ‘valence’, especially shortly prior to election windows. Such measures include loan-waivers, interest rate concessions, provision of free electricity for agriculturists, etc. The union government’s leverage to maneuver and to micro-manage retail fuel prices within partially deregulated environments is hypothesized to provide incumbents with an advantage over rival contestants in the electoral process. This paper analyzes the evolution in the retail prices of diesel and petrol (gasoline), and the transfer of such evolution, into the inflation index of the ‘all commodity’ basket. It is observed that when international benchmark prices are relatively low and domestic inflation is moderate, the transfer occurs within about 42 weeks. During periods of high oil prices-frequently above USD 100 a barrel-and high inflation-higher than 5.00–5.50%-prices of petroleum distillates tend to feed into overall inflation more rapidly, within about 34–40 weeks.

Keywords: Administered prices; Coalition governments; Populist measures; Anti-incumbency; Electoral outcomes (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421514000317
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:68:y:2014:i:c:p:465-475

DOI: 10.1016/j.enpol.2014.01.026

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().