UPA allies pinpricks on fuel price hike

Though criticism of the fuel price hike in the Pranab Mukherjee’s Union Budget presented in Parliament on February 26 was expected from the opposition parties and the Left, the strong demand by two key allies of the Congress—Trinamool Congress and Dravida Munnetra Kazhagam—has not come as a surprise to political analysts.

The two regional parties having a strong clout in West Bengal and Tamil Nadu respectively, have their own political compulsions. Both the Trinamool and the DMK face elections in 2011. Mamata Banerjee of Trinamool Congress has set her eyes on the chief ministership of West Bengal after the next assembly elections. Though part of the government, holding the Railways portfolio, Mamata is known for her short temper and has had a troublesome relations within the BJP-led opposition NDA alliance.

Obviously, she would not like to be part of any unpopular decision by the Centre, like petrol, diesel price hike. She had not hidden her disappointment with the Congress and Prime Minister Manmohan Singh on handling the Maoists’ upsurge in West Bengal. Both the ruling Left and the Trinamool have traded charges on encouraging the Maoist violence. She has also been critical of government’s inability to check the high prices of rice, wheat, sugar and pulses.

Though Mamata has already launched street protests in Kolkata over the rise in fuel prices, the Congress is not unduly worried about the ally’s anger and rhetoric. Congress leaders attribute the apparent hostility to the need for posturing to impress Trinamool voters.

Speaking in New Delhi, Mukherjee soft-pedaled the resentment among the allies. He went on the defensive, saying the inflationary impact of the duty hikes would be minimal, just adding 0.4% to overall inflation. He blamed supply side constraints and an inefficient public delivery system for shortages and price rise in food items. "Our PDS is not geared to distribute efficiently...the gap between farm gate and retail is large," he said.

Congress leaders feel that the quantum of hike was not so high as to cause widespread disaffection. There had been no hikes for a while and as long as prices did not shoot up steeply, the political fallout could be contained.

The assessment in Congress circles is that the allies, particularly Mamata Banerjee, though worked up over the fuel hikes due to restoration of custom and excise duties, would not push their point too far. The Congress is fairly confident that the DMK is not inclined to up the ante at present and in any case, the finance bill was not up for a vote till April. DMK chief M. Karunanidhi had shot off a letter to the PM and Pranab Mukherjee to consider a rollback of the fuel prices.

Congress Ministers do admit that there was no escaping a generalized inflation but pointed out that duty restoration had been inevitable in view of the need to curb deficits. Allies would have to understand the compulsions that the Centre had to work under and the government could, in the meanwhile, send a stronger signal on anti-inflationary measures. There is an expectation that food prices will cool as the rabi crop progresses well.

The Opposition is expected to keep up its pressure on prices as it looks to exploit an obvious political and public issue.

- Asian Tribune -