In the run-up to the budget, the Congress Working Committee met on February 5 to discuss the state of the economy, especially rising food prices. At that meeting, Union agriculture minister Sharad Pawar was roundly attacked for mismanaging the food and agriculture sector. But even as food prices topped that day’s agenda, other members, including party general secretary Kesava Rao, warned against hiking prices of petroleum products at a time when the “common man is groaning under the impact of (food) prices...”
So, amidst a noisy Opposition walkout on budget day, aghast Congress MPs tried to figure out the implications of the petrol/diesel hike on the economy—and their political futures. Even a savvy MP like Milind Deora, son of petroleum minister Murli Deora, was so taken aback that he said he didn’t think it was the right time to effect a hike. Today, Milind—like every other Congress MP—is convinced that the government had no option. “No politician wants to raise prices,” he says, “but when the pros and cons of the government’s long-term strategy were explained, we all understood why it has been done.”
Indeed, in the week since the budget, the Congress leadership has worked overtime to defuse the situation. After the PM said on March 2 that his government would not roll back the petroleum price hike, the party’s core committee—of which Congress president Sonia Gandhi is a member—endorsed it. The next day, finance minister Pranab Mukherjee explained the imperatives of the budget to Congress MPs, and later to its allies—the Trinamool Congress and the DMK have been publicly demanding a rollback.
The petrol/diesel hike, the FM said, was the only way he could control the fiscal deficit while mobilising money for the social sector. Armed with figures, he pointed out that the increase in the prices of petroleum products during the UPA’s stint in power since 2004 was much less than that in the NDA’s six years in power. Finally, he admitted that 2010 provided UPA-II with the only opportunity to take hard decisions, with state elections due next year in West Bengal, Kerala and Tamil Nadu.
Finally, on March 4, Sonia, while addressing the Congress Parliamentary Party, gave her seal of approval for the hike, congratulating the FM for a “fine and delicate balancing act”. She also put the focus back on the aam aadmi, saying the government’s next step would be to enact legislation for food security, while emphasising that food price inflation detracted from the UPA’s “outstanding accomplishment in sustaining high economic growth...so essential for generating resources for social welfare programmes”.
Currently, the Congress believes it has a few things going for it. One, it hopes the rabi crop due next month will bring down food prices. Two, it is convinced that its allies, while they continue to grumble, will not withdraw support. The main Opposition parties are not yet in the mood to pull the government down. And finally, the brahmastra: the Women’s Reservation Bill, which the UPA is bringing to Parliament on March 8. The Congress feels this alone will divide the Opposition, with the Left and bjp on one side and the socialists of varying hues on the other. Indeed, a story doing the rounds is that the two Yadavs—Mulayam and Laloo—have promised unconditional support if the bill is withdrawn!
