NCP lands Congress on slippery pitch

The Congress and NCP cold war over the hike in prices of diesel, kerosene and cooking gas has once again exposed the existing cracks within the coalition government. It has also highlighted how competitive politics has overtaken economics with chief minister Prithviraj Chavan pitted against deputy chief minister (also finance minister) Ajit Pawar.

The NCP, by taking to the streets over the price rise, has certainly succeeded in putting the Congress on the slippery pitch on matters related to oil and gas. But before they could rejoice, Chavan gave his cabinet colleagues a nightmare when he revealed the state would be losing Rs1,400 crore for extending tax concessions on kerosene and diesel.

The state finance minister is now unable to explain how he intends to mobilise additional resources to cover the deficit and salvage the surplus budget. Chavan, who is justifying the Centre's decision, explains, “ The real cost of each cooking cylinder (LPG) is Rs750. In that sense, even after increasing Rs50 per cylinder, the government is giving subsidy of Rs380 per cylinder.” The argument extended by the Congress is that the Centre is already giving Rs49,000 crore worth of subsidies on oil and cooking gas. If the public sector units (oil and gas companies) have to survive, a frequent hike is possible.

If we set aside populist politics, economics would suggest that the rich and the upper middle class, who can afford to spend Rs450 on a pizza, could certainly shell out that extra Rs380 for a cylinder. But what about those 3 crore people who cannot afford even two decent meals?

Notwithstanding the ambitious plan to raise the per capita income of the state from Rs45,000 to Rs1,00,000, the reality is 45% of people still earn less than Rs10,000 a month. A hike in diesel of Rs3 per litre translates into a minimum 15-25% rise in the average  family budget.

Despite economic compulsions, the ruling combine cannot lose sight of the social responsibility towards neglected sections reeling under inflation. Nor can it blame the opposition parties for agitations against inflation.

Cleverly, the NCP has promptly given a clarion call to hold demonstrations against the Congress coalition at the Centre.

However, the NCP cannot explain how its senior cabinet ministers, who are in the government at the Centre and state, can enjoy the fruits of power and yet agitate against policy matters.

Moreover, the purpose of finance minister Ajit Pawar and home minister RR Patil was actually limited to teaching the Congress a lesson for always hitting against union agriculture minister Sharad Pawar on food inflation. On its part, the Congress is now wondering how to wriggle out of the situation which it says is beyond its control.