Govt in trouble over floundering economy?

The Asian Age.  | Sreeparna Chakrabarty

The speculation is rife that government might resort to either cutting the excise duty or compromise on its fuel deregulation policy .

Members of MNS Women’s Wing (left) stage a demonstration to protest against hike in fuel prices, in Navi Mumbai.

Year 2012. The Congress-led UPA government had approved the steepest ever hike in petrol prices across the country. The petrol prices suddenly went up by Rs 7.54 per litre. Petrol price in New Delhi reached Rs 73.18 a litre.

Narendra Modi, who was the chief minister of Gujarat at that juncture, tweeted: “Massive hike in #petrol prices is a prime example of the failure of Congress-led UPA. This will put a burden of hundreds of crores on Guj.”

After a week, the BJP joined hands with the Left Front to call a Bharat Bandh against petrol prices. After nearly nine months when the UPA went for another hike in March 2013 the BJP disrupted Parliament over the issue.

Today petrol prices in the national capital is Rs 79.99 and diesel is Rs 72.07. A deathly silence prevails in the saffron camp. While the silence is deafening, some BJP leaders whisper: “This is mainly because fall in Indian rupee and of course rise of crude at the global level.”

In the penultimate year of its five-year term, the Modi government could be  be in serious trouble over rising fuel prices and falling value of the rupee. Analysts say politically rising fuel prices are a political hot potato for any regime as they increase the burden on common citizens affecting the government’s popularity.

It also raises questions on the government’s taxation policy as more than half of the money that is paid by the consumer goes to the government in the form of taxes.

Though there have been many other political issues like the dilution of the Scheduled Castes and Scheduled Tribes Atrocities Act and cow vigilantism which had the potential to rattle the political narrative of the government, the Opposition has been careful not to involve the BJP dispensation into binaries like Dalit versus upper castes or Hindus versus Muslims.

Loktantrik Janata Dal leader Sharad Yadav rides a bullock-cart during a protest against steep hike in fuel prices, in Patna.

However, the same Opposition has been quick to cash in on the rising fuel prices and has announced a combined nationwide bandh on September 10. Led by the Congress, almost all Opposition parties including several regional parties and the Left have decided to pin down the government over this issue. Left-backed mass organisations had also backed a long march by workers and farmers last week over agrarian distress and job creation. The Opposition has accused the government of refusing to bring down fuel prices by cutting excise duty. It has also sought that petrol and diesel be brought under GST.

According to Congress chief spokesperson Randeep Surjewala: “RTI has revealed that the Modi government is selling diesel for Rs 34/litre and petrol for Rs 37/litre to other countries, whereas in India the price is too high. LPG has increased from Rs 400 to Rs 800. Prices of things that are used daily are inflated under Modi government. On September 10, a movement will be called against the ‘fuel loot’ by which Modi government has profited Rs 11,00,000 crore”.

At a meeting of senior leaders of the Congress Party in Delhi on Thursday, apart from the Rafale issue, rising petrol prices would also be taken up as a major poll plank.

Assembly elections are due in four states of Rajasthan, Madhya Pradesh, Chattisgarh and Mizoram. “The fuel prices are skyrocketing, whereas the government is silent. We’ll do a nationwide protest and will keep raising this issue in Rajasthan too,” Rajasthan Pradesh Congress Committee chief Sachin Pilot said.

The Congress Party has put the blame of high prices of petrol and diesel on the government mismanagement of the economy.